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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant To Section 14(a) of the
Securities Exchange Act of 1934.
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6 (e) (2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Under Rule 14a-12
FUNDTECH, LTD.
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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(NAME OF PERSON (S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(I) (1) and
0-11.
1) Title of each class of securities to which transaction applies:
Not applicable.
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2) Aggregate number of securities to which transaction applies:
Not applicable.
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): Not
applicable.
Not applicable.
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4) Proposed maximum aggregate value of transaction:
Not applicable.
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5) Total fee paid:
Not applicable.
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[_] Fee paid previously with preliminary materials: Not applicable.
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[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
1) Amount previously paid: Not applicable.
2) Form, Schedule or Registration Statement No.: Not applicable.
3) Filing Party: Not applicable.
4) Date Filed: Not applicable.
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<PAGE>
[FUNDTECH LTD. LOGO]
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting
of Shareholders of Fundtech Ltd. (the "Company") on November 30, 2000, beginning
at 10:00 a.m., local time, at the Company's offices at 12 Ha'hilazon Street,
(5th floor) Ramat Gan, Israel. We look forward to greeting as many of you as can
attend the Annual Meeting.
Holders of the Company's Ordinary Shares are being asked to
vote on the matters listed in the enclosed Notice of Annual Meeting of
Shareholders. YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE MATTERS
SET FORTH IN THE NOTICE.
Whether or not you plan to attend the Annual Meeting, it is
important that your Ordinary Shares be represented and voted at the Annual
Meeting. Accordingly, after reading the enclosed Notice of Annual Meeting and
accompanying Proxy Statement, please sign, date and mail the enclosed proxy card
in the envelope provided.
Very truly yours,
Reuven Ben-Menachem
Chairman of the Board and
Chief Executive Officer
NY2:\922145\05\JRJ505!.DOC\46984.0001
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders
of Fundtech Ltd.:
The Annual Meeting of Shareholders of Fundtech Ltd. ("Fundtech" or
the "Company") will be held at the Company's offices at 12 Ha'hilazon Street,
(5th floor), Ramat Gan, Israel, on November 30, 2000, at 10:00 a.m., local time,
for the following purposes:
1. To elect the directors of the Company to serve until their respective
successors are elected and qualified ("Proposal 1").
2. To approve the service of Mr. Reuven Ben-Menachem as Chairman of the
Board and Chief Executive Officer ("Proposal 2").
3. To ratify and approve an increase in the number of Ordinary Shares
reserved for issuance pursuant to the Company's Directors' Option Plan
("Proposal 3").
4. To approve the compensation of the Company's directors for 2000
("Proposal 4").
5. To ratify and approve the compensation and Option Awards of Mr. Reuven
Ben-Menachem, a member of the Company's Board of Directors and
Fundtech's Chief Executive Officer ("Proposal 5").
6. To ratify and approve amendments to the Company's 1997 Israel Plan and
the 1999 Option Plan, increasing the aggregate number of Ordinary
Shares reserved under such Plans ("Proposal 6").
7. To ratify the appointment of Kost, Forer and Gabbay, a member of Ernst
& Young International, independent certified public accountants, as
auditors for Fundtech for fiscal year 2000 and authorize the Board of
Directors to set the remuneration for such auditors ("Proposal 7").
8. To ratify and approve amendments to the Company's Articles of
Association ("Proposal 8").
9. To act upon such other matters as may properly come before the meeting
or any adjournment or adjournments thereof.
In addition, the Annual Meeting shall include a general discussion
with respect to the financial statements contained in the Company's Annual
Report, a copy of which is enclosed herein. Only shareholders of record at the
close of business on October 23, 2000, are entitled to notice of, and to vote
at, the meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING AND REGARDLESS
OF THE NUMBER OF ORDINARY SHARES YOU OWN, YOU ARE REQUESTED TO FILL IN, DATE AND
SIGN THE ENCLOSED PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS OF THE
COMPANY, AND TO MAIL IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
You may revoke your proxy by filing with the Secretary a written
revocation or a proxy bearing a later date at any time prior to the time it is
voted, or by voting in person at the Annual Meeting.
By Order of the Board of Directors,
Michael S. Hyman
Vice President, General Counsel and Secretary
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Ramat Gan, Israel
November 9, 2000
FUNDTECH LTD.
12 HA'HILAZON STREET, 5TH FLOOR
RAMAT GAN, ISRAEL
--------------------
PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is being furnished to holders of
Ordinary Shares, par value NIS. 0.01 ("Ordinary Shares"), of Fundtech Ltd., an
Israeli corporation ("Fundtech" or the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
Annual Meeting of Shareholders of the Company to be held on November 30, 2000,
at 10:00 a.m., local time, at the Company's offices at 12 Ha'hilazon Street (5th
Floor), Ramat Gan, Israel, and at any adjournment or adjournments thereof (the
"Annual Meeting"). This Proxy Statement and the accompanying form of proxy are
first being mailed to shareholders on or about November 9, 2000.
THE PROXY
Oz Cohen, Vice President, Business Development and
Strategic Planning and Michael S. Hyman, Vice President, General Counsel and
Secretary of the Company, have each been selected as proxies by the Board of
Directors of the Company with respect to the matters to be voted upon at the
Annual Meeting.
All Ordinary Shares represented by properly executed
proxies received twenty four (24) hours prior to the Annual Meeting and not
revoked prior to the Annual Meeting in accordance with the procedure therefor
will be voted and will be voted as specified in the instructions indicated in
such proxies. IF NO INSTRUCTIONS ARE INDICATED, SUCH PROXIES WILL BE VOTED IN
ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS CONTAINED IN THIS
PROXY STATEMENT AND, IN THE DISCRETION OF EITHER PERSON NAMED IN THE PROXY, ON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
A shareholder may revoke his, her or its proxy at any time
prior to use of such proxy by delivering to the Secretary of the Company a
signed notice of revocation or a later dated and signed proxy or by attending
the Annual Meeting and voting in person. Attendance at the Annual Meeting will
not in itself constitute the revocation of proxy.
SHAREHOLDERS ENTITLED TO VOTE
Shareholders of record owning Ordinary Shares at the close
of business on October 23, 2000 (the "Record Date") are entitled to notice of,
and to vote at, the Annual Meeting. On the Record Date, there were 14,177,423
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Ordinary Shares outstanding (excluding 50,002 Deferred Ordinary Shares), with
each Ordinary Share entitled to one vote per share on each matter submitted to
shareholders for consideration at the Annual Meeting.
QUORUM; REQUIRED VOTE
The presence, in person or by proxy, of the holders of
record of at least 33 and 1/3 percent of the issued and outstanding Ordinary
Shares entitled to vote at the Annual Meeting is necessary to constitute a
quorum and is necessary to hold the Annual Meeting.
The affirmative vote of a majority of the Ordinary Shares
present at the Annual Meeting is required to elect the nominees for directors in
respect to the election of directors (Proposal 1), to approve the continued
simultaneous service of Mr. Reuven Ben-Menachem as Chairman of the Board and
Chief Executive Officer of the Company (Proposal 2), to ratify and approve an
increase in the number of Ordinary Shares reserved for issuance pursuant to the
Company's Directors' Option Plan (Proposal 3), to approve the compensation of
the Company's directors for 2000 (Proposal 4), to ratify and approve the
compensation and Option Awards of Mr. Reuven Ben-Menachem, a member of the
Company's Board of Directors and Fundtech's Chief Executive Officer (Proposal
5), to ratify and approve amendments to the Company's 1997 Israel Plan and the
1999 Option Plan, increasing the aggregate number of Ordinary Shares reserved
under such Plans (Proposal 6), and to ratify the appointment of Kost, Forer and
Gabbay, a member of Ernst and Young International, as the Company's independent
auditors, and authorize the Board of Directors to set the remuneration for such
auditors (Proposal 7). The affirmative vote of 75% of the Ordinary Shares
present at the Annual Meeting is required to approve amendments to the Company's
Articles of Association (Proposal 8). With respect to the election of Jay B.
Morrison, George M. Lieberman and Gil Weiser, the Company's nominees for
external directors (Proposal 1), the majority must include either at least
one-third of the shares of non-controlling shareholders voting on the matter or
the total shares of non-controlling shareholders voted against the election may
not represent more than one percent of the voting rights in the Company. With
respect to the approval of the continued simultaneous service of Mr. Reuven
Ben-Menachem as Chairman of the Board and Chief Executive Officer of the Company
(Proposal 2), the majority must include at least two-thirds of the shares of
non-controlling shareholders voting on the matter.
On each matter submitted to shareholders for consideration
at the Annual Meeting, only Ordinary Shares that are voted in favor of such
matter will be counted towards approval of such matter. Ordinary Shares present
at the Annual Meeting that are not voted for a particular matter or Ordinary
Shares present by proxy where the shareholder properly withheld authority to
vote for such matter (including broker non-votes) will not be counted toward
approval of such matter. Shareholders will not be allowed to cumulate their
votes in the election of directors.
A broker non-vote occurs when a nominee holding Ordinary
Shares for a beneficial owner does not vote on a particular proposal because the
nominee does not have discretionary voting power with respect to that proposal
and has not received instructions from the beneficial owner. On all matters
considered at the Annual Meeting, abstentions and broker non-votes will be
treated as neither a vote "for" nor "against" the matter, although they will be
counted as present in determining if a quorum is present.
PROPOSAL 1 - ELECTION OF DIRECTORS
The Company's Board of Directors has nominated 7 persons to
be elected at the Annual Meeting to serve as directors of the Company. All of
the nominees currently serve as directors of the Company and are nominated to
serve as directors until the close of the next Annual Meeting. Jay B. Morrison,
George M. Lieberman and Gil Weiser qualify as external directors under the
requirements of the Israeli Companies Law, 5759-1999 (the "Companies Law"), and
are nominated to serve as external directors for a period of three years from
the date of the meeting.
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Each of the below-named nominees has consented to being
named in this Proxy Statement and will serve as a director if elected. If at the
time of the Annual Meeting, however, any of the below-named nominees should be
unable or decline to serve, the persons named as proxies herein will vote for
such substitute nominee or nominees as the Board of Directors recommends, or
will vote to allow the vacancy created thereby to remain open until filled by
the Board of Directors (except for those persons nominated to serve as external
directors), as the Board of Directors recommends.
The affirmative vote of the holders of a majority of the
voting power represented at the meeting in person or by proxy is necessary to
elect each of the below-named (including Jay B. Morrison, George M. Lieberman
and Gil Weiser) as directors. In addition, the affirmative vote of a Special
Majority (as defined above) of the voting power represented at the meeting in
person or by proxy is necessary to elect each of Jay B. Morrison, George M.
Lieberman and Gil Weiser as external directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL
TO ELECT EACH OF THE BELOW-NAMED AS DIRECTORS.
The following table lists the name, age and positions with
the Company of each of the nominees and the month and year in which each
director was first elected.
<TABLE>
<CAPTION>
Served as
Name Age Position with the Company Director Since
---- --- ------------------------- --------------
<S> <C> <C> <C>
Reuven Ben-Menachem 40 Chief Executive Officer, April 1993
President and Director
George M. Lieberman 57 Director December 1998
Jay B. Morrison 53 Director April 1995
Achi Racov 55 Director September 1999
Rina Shainski 41 Director March 1999
Rimon Ben-Shaoul 55 Director August 1998
Gil Weiser 59 Director July 2000
</TABLE>
Nominees
REUVEN BEN-MENACHEM, a co-founder of Fundtech, has served
as Fundtech's Chief Executive Officer and President, as a director of Fundtech
since its inception in April 1993 and as Chairman of the Board of Directors
since August 1998. Before founding Fundtech, Mr. Ben-Menachem was employed at
Logica Data Architects, a funds transfer software provider, most recently as a
Technical Director and a Product Manager. From January 1984 until June 1986, Mr.
Ben-Menachem served as Director of Banking Systems at Manof Communications
Systems, a middleware software provider. Prior thereto, Mr. Ben-Menachem served
as a senior programmer/analyst in the Israeli Air Force.
GEORGE M. LIEBERMAN has served as a director of Fundtech
since 1998. He is an E-Commerce innovator. Mr. Lieberman is the Chief Technology
Officer of Versus International Group Limited, a global investment company. Up
until April 2000, Mr. Lieberman served as Chief Information Officer of WIT
Capital Group, a pioneer Internet investment firm. He has held the position of
Director of Fundtech Corporation, a leader in Global Payment Systems since
December 1998. Prior to January 1999, he held a number of positions at Merrill
Lynch & Co. including First Vice President of Technology Strategy and Planning
and was a member of the Merrill Lynch Technology Advisory Board. Mr. Lieberman
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has more than 30 years of information technology management and development
experience across a broad spectrum of industries. He holds two computer related
patents. Mr. Lieberman was also responsible for the development of major systems
projects at many financial industry companies including Citibank and ADP. Mr.
Lieberman holds advanced degrees in Industrial Engineering and Operations
Research. Mr. Lieberman is the Chairman of the Corporate Advisory Board of The
Institute for Technology and Enterprise part of the Polytechnic University of
New York.
JAY B. MORRISON has served as a director of Fundtech since
April 1995 and was Co-Chairman of the Board of Directors until August 1998. Dr.
Morrison has been a General Partner of Newbury Ventures, Inc., a venture capital
investment firm, since 1992. Prior thereto, Dr. Morrison held a number of
positions with Govett & Co. Ltd., a European international fund management
company, including Chief Financial Officer and President of its venture capital
subsidiary from 1990 to 1991. Dr. Morrison is currently a Director of Jacada
Ltd. Dr. Morrison holds B.Ie. and M.S. degrees from Ohio State University and a
Ph.D from the University of California, Berkeley, and has more than 15 years of
experience in investing in and working with emerging growth companies.
ACHI RACOV has served as a director of Fundtech since
September 1999. Mr. Racov has served as Chief Information Officer of National
Westminster Bank Group, London ("NatWest Group"). Prior to his position as Chief
Information Officer, Mr. Racov served as Director of Architecture & Governance
of NatWest Group IT from 1994 through 1996. From 1991 through 1994, Mr. Racov
was employed by Nedcor, South Africa, as IT Executive Strategy and Technology.
From 1978 to 1990, Mr. Racov served as Technical Director of MSS International.
From 1975 to 1978, Mr. Racov served as Technology Specialist at Digitron. From
1971 to 1975, Mr. Racov served as General Manager, Systems and Development, of
Burroughs Israel and served as Project Leader and Head of Support at the Israeli
Ministry of Education from 1967 to 1970. Prior thereto, Mr. Racov served as an
Electronics Engineer in the Israeli Army.
RINA SHAINSKI has served as a director of Fundtech since
March 1999 after serving as an alternate director of Fundtech since August 1998.
Ms. Shainski has served as General Partner of Carmel Ventures Fund since April
2000. Ms. Shainski has served as Vice President Business Development of Clal
Industries and Investments Ltd. ("CII"), one of Israel's largest investment and
holding companies, which is invested primarily in the industrial and technology
sectors, since September 1997. From 1989 until 1996, Ms. Shainski was employed
by Tecnomatix Technologies Ltd., most recently as Director Research &
Development and Vice President Business Development. Ms Shainski has more than
13 years of experience in management of high-tech software companies. Ms.
Shainski holds an M.Sc. degree in Computer Science from Weizmann Institute of
Science, Israel and a B.Sc. degree in Physics from Tel Aviv University. Ms.
Shainski is a graduate of the International Executive Program in Insead,
Fontainbleau, France.
RIMON BEN-SHAOUL has served as a director of Fundtech since
August 1998. He has also served as President of CII since May 1997. From 1985
until 1997, Mr. Ben-Shaoul served as President and as a member of the board of
directors of Clal Insurance Company Ltd. Mr. Ben Shaoul also serves as the
chairman or a member of the boards of directors of several other companies in
which CII has interests. Mr. Ben-Shaoul earned a B.A. in Economics as well as an
M.B.A. from Tel Aviv University.
GIL WEISER has served as a director of Fundtech since July
2000. Mr. Weiser has served as the General Manager of Hewlett Packard (Israel).
Prior to serving as General Manager of Hewlett Packard (Israel), Mr. Weiser
served as President and Chief Executive Officer of Computation and Measurement
Systems Ltd. (CMS), the Israeli representative of Hewlett Packard from 1995
until 1998. From 1993 to 1995, Mr. Weiser served as President and Chief
Executive Officer of Fibronics International Inc., a worldwide provider of
network solutions for complex data operations in heterogeneous computing
environments. From 1976 until 1993, Mr. Weiser served as Managing Director of
Digital Israel, a wholly owned subsidiary of Digital Equipment Corporation. Mr.
Weiser has and continues to hold significant public positions including Chairman
of the Multinational Companies Forum and Vice Chairman of the Israeli Management
Center. Presently he serves as Chairman of the Executive Board of Haifa
University, one of the leading institutions of higher education in Israel. Mr.
Weiser has earned a B.S.E.E. in Electrical Engineering from the Technion as well
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as an M.S.E.E. in Electronics Computer Sciences from the University of
Minnesota.
EXTERNAL DIRECTORS
The Companies Law became effective on February 1, 2000.
Under the Companies Law, companies incorporated under the laws of Israel whose
shares have been offered to the public in or outside of Israel are required to
appoint at least two independent, or external, directors. A person may not be
appointed as an external director if the person or the person's relative,
partner, employer or any entity under the person's control, has, as of the date
of the person's appointment as external director, or had, during the preceding
two years, any affiliation with the company, any person or entity controlling
the company or any entity controlled by the company or by this controlling
entity. The term "affiliation" includes:
o an employment relationship;
o business or professional relationship maintained on a regular
basis;
o control; and
o service as an office holder.
A person may not serve as an external director if the
person's affiliation with the company creates, or may create, a conflict of
interests with the person's responsibilities as an external director or may
adversely impact such person's ability to serve as an external director.
Under the Companies Law, each committee which is authorized
to exercise one of the functions of the board of directors is required to
include at least one external director. The term of an external director is
three years and may be extended for an additional three years. Until the lapse
of two years from termination of service as director, a company may not engage
an external director to serve as an office holder and cannot employ or receive
services from that person, either directly or indirectly, including through a
corporation controlled by that person. The external directors must be elected by
the majority of the shareholders in a general meeting, provided that such
majority either includes at least one-third of the shares of non-controlling
shareholders voted on the matter, or the total shares of non-controlling
shareholders voted against the election do not represent more than one percent
of the voting rights in the company.
Jay B. Morrison, George M. Lieberman and Gil Weiser satisfy
the requirements of the Companies Law with respect to external directors.
AUDIT COMMITTEE; INTERNAL AUDITOR
Pursuant to the Companies Law, the board of directors of a
public company must appoint an audit committee as well as an internal auditor.
The audit committee must be comprised of at least three directors, including all
of the external directors. The audit committee may not include the chairman of
the board, any director employed by the company or providing services to the
company on a regular basis or a controlling shareholder or his relative. The
role of the audit committee is to examine problems in the management of the
company, in consultation with the internal auditor and the company's auditor,
and suggest an appropriate course of action. In addition, the approval of the
audit committee is required to effect specified actions and transactions with
office holders and interested parties. The role of the internal auditor is to
examine, among other things, whether the company's acts comply with the law and
follow orderly business procedures. The internal auditor may be an employee of
the company but may not be an interested party, an office holder or a relative
of an interested party or office holder, and may not be a member of the
company's independent accounting firm or its representative.
FIDUCIARY DUTIES OF OFFICE HOLDERS
The Companies Law codifies the fiduciary duties that
"office holders," including directors and executive officers, owe to a company.
An office holder's fiduciary duties consist of a duty of care and a duty of
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loyalty. The duty of care requires an office holder to act with the same level
of skill with which a reasonable office holder in the same position would act
under the same circumstances. This includes a duty to use reasonable means to
obtain information on the advisability of a given action brought for such office
holder's approval or performed by him by virtue of his position, and all other
significant information pertaining to such action. The duty of loyalty requires
an office holder to act in good faith and for the company's benefit, and
includes avoiding any conflict of interest between the office holder's position
in the company and any other position held by him or his personal affairs,
avoiding any competition with the company, avoiding exploiting any business
opportunity of the company in order to receive personal advantage for himself or
others, and revealing to the company any information or documents relating to
the company's affairs which the office holder has received due to his position
as an office holder. Each person listed in the table under "--Election of
Directors" above is an office holder. Under the Companies Law, all arrangements
as to compensation of office holders who are not directors require approval of
the board of directors and, with respect to indemnification and insurance of
these office holders, also require audit committee approval. Arrangements
regarding the compensation of directors require the approval of the audit
committee, board of directors and shareholders.
APPROVAL OF TRANSACTIONS UNDER THE COMPANIES LAW
The Companies Law requires that an office holder of the
company promptly disclose any personal interest that he or she may have and all
related material information known to him or her in connection with any existing
proposed transaction by the company. If the transaction is an extraordinary
transaction as defined under Israeli law, the office holder must also disclose
any personal interest held by the office holder's spouse, siblings, parents,
grandparents, descendants, spouse's descendants and the spouses of any of the
foregoing. In addition, the office holder must also disclose any interest held
by any corporation in which the office holder is a five percent (5%) or greater
shareholder, director or general manager or in which he or she has the right to
appoint at least one director or the general manager. An extraordinary
transaction is defined as a transaction other than in the ordinary course of
business, otherwise than on market terms, or that is likely to have a material
impact on the company's profitability, assets or liabilities.
In the case of a transaction of the company with an office
holder which is not an extraordinary transaction, after the office holder
complies with the above disclosure requirement only approval of the board of
directors is required unless the company's articles of association provide
otherwise. The transaction must not be adverse to the company's interest.
Furthermore, if the transaction is an extraordinary transaction, then, in
addition to any approval stipulated by the articles of association, it also must
be approved by the company's audit committee and then by the board of directors,
and, under certain circumstances, by the shareholders of the company. In most
cases an office holder who has a personal interest in a matter which is
considered at a meeting of the board of directors or the audit committee may not
be present at the meeting or vote on this matter.
The Companies Law applies the same disclosure requirements
to a controlling shareholder of a public company. A controlling shareholder is a
shareholder who has the ability to direct the operation of the company (except
if such ability derives only from his position as director or office holder in
the company), including a shareholder that holds 25% or more of the voting
rights if no other shareholder owns more than 50% of the voting rights in the
company. Extraordinary transactions with a controlling shareholder or in which a
controlling shareholder has a personal interest, and the terms of compensation
of a controlling shareholder who is an office holder, require the approval of
the audit committee, the board of directors and the shareholders of the company.
The shareholder approval must include at least one-third of the shareholders who
have no personal interest in the transaction and are present (in person or by
proxy) at the meeting or, alternatively, the total shareholdings of those who
have no personal interest in the transaction who vote against the transaction
must not represent more than one percent of the voting rights in the company.
In addition, a private placement of securities that will
increase the relative holdings of a shareholder that holds five percent (5%) or
more of the company's outstanding share capital (assuming the exercise or
conversion of all securities held by such person that are exercisable for or
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convertible into shares) or that will cause any person to become, as a result of
the issuance, a holder of more than five percent (5%) of the company's
outstanding share capital, requires approval by the board of directors and the
shareholders of the company.
The Articles of Association of Fundtech provide that the
Board may delegate all of its powers to such committees of the Board as it deems
appropriate, subject to the provisions of the applicable law.
For information concerning the direct and indirect personal
interests of certain Office Holders and principal shareholders of Fundtech in
certain transactions with Fundtech, see "Certain Relationships and Related Party
Transactions."
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 260 and 261 of the Companies Law permit a company
to perform both of the following actions, provided that such actions are
authorized by the company's articles of association: (i) insure a director or
officer for the breach of his duty of care or, to the extent he acted in good
faith and had a reasonable basis to believe that the act would not prejudice the
company, for the breach of his fiduciary duty as well as for monetary
liabilities charged against him as a result of an act or omission he committed
in connection with his serving as an officer or director of the company, and
(ii) indemnify an officer or director for monetary liability incurred by him
pursuant to a judgment, including a settlement or arbitration decision approved
by a court, as well as for reasonable legal expenses incurred by him in an
action brought against him by or on behalf of the company or others, or as a
result of a criminal charge of which he was acquitted, or as a result of a
criminal procedure in which he was convicted of a felony which does not require
proof of criminal intent provided that any such liability or expense incurred by
such office holder is due to an action performed by such office holder by virtue
of his position with the company. These provisions are specifically limited in
their scope by Section 263 of the Companies Law, which provides that a company
may not indemnify an officer or director nor enter into an insurance contract
which would provide coverage for any liability incurred as a result of the
following: (a) a breach by the officer or director of his fiduciary duty unless
he acted in good faith and had a reasonable basis to believe that the act would
not prejudice the company; (b) a breach by the officer or director of his duty
of care if such breach was done intentionally or recklessly; (c) any act or
omission done with the intent to derive an unlawful personal benefit; or (d) any
fine levied against such officer or director.
The Articles of Association of Fundtech provide that
Fundtech may enter into a contract for the insurance of the liability, in whole
or in part, of any of its Office Holders (as defined below) with respect to: (i)
a breach of his duty of care to Fundtech or to another person; (ii) a breach of
his fiduciary duty to Fundtech, provided that the Office Holder acted in good
faith and had a reasonable basis to assume that his act would not prejudice the
interests of Fundtech; or (iii) a financial liability imposed upon him in favor
of another person in respect of an act performed by him in his capacity as an
Office Holder of Fundtech. In addition, Fundtech may indemnify an Office Holder
against: (i) a financial liability imposed on him in favor of another person by
any judgment, including a compromise judgment or an arbitrator's award approved
by a court in respect of an act performed in his capacity as an Office Holder of
Fundtech, and (ii) reasonable litigation expenses, including attorneys' fees,
incurred by such Office Holder or charged to him by a court in proceedings
instituted against him by Fundtech or on its behalf or by another person, or in
a criminal charge from which he was acquitted, all in respect of an act
performed in his capacity as an Office Holder of Fundtech. The Articles of
Association of Fundtech state that an Office Holder of Fundtech includes a
director, a general manager, the chief executive officer, an executive vice
president, a vice president, other managers directly subordinate to the general
manager and any person who fills one of the above positions in Fundtech, even if
he holds a different title. Fundtech has obtained directors and officers
liability insurance for the benefit of Fundtech's Office Holders.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has an Audit and
Control Committee (the "Audit Committee") and a Compensation Committee.
9
<PAGE>
Audit Committee
The Audit Committee, which consists of Ms. Rina Shainski,
Mr. Jay B. Morrison and Mr. George M. Lieberman, exercises the powers of the
Board of Directors with respect to the accounting, reporting and financial
control practices of the Company. In the event of his election as an external
director of the Company, the Board of Directors shall appoint Mr. Gil Weiser as
a member of the Audit Committee.
Compensation Committee
The Compensation Committee, which consists of Ms. Rina
Shainski, Mr. Achi Racov and Mr. Jay B. Morrison, administers the Company's
stock option plans and the Company's overall compensation practices.
DIRECTORS' COMPENSATION
Pursuant to the Company's Directors' Option Plan, in 1999
the Company granted options to purchase up to 6,000 Ordinary Shares to each
member of the Board of Directors. For additional information regarding stock
options to purchase Ordinary Shares granted to Reuven Ben-Menachem as a director
or as an employee - see " Compensation Committee Report - CEO" below.
We do not otherwise compensate directors for attending
meetings of the board of directors or committee meetings of the board of
directors, but we do reimburse directors for their reasonable travel expenses
incurred in connection with attending these meetings.
DIRECTORS' ATTENDANCE
The Board of Directors held 10 meetings during Fiscal 1999.
Except for George M. Lieberman, who attended 60% of the Board of Directors
meetings, none of the incumbent directors attended (including through the means
of the appointment of an alternate director or through a proxy, as permitted
under Fundtech's Articles of Association) fewer than 75% of the aggregate of (i)
the total number of meetings of the board of directors (held during the period
that such director was in office) and (ii) the total number of meetings of all
committees of the Board of which such director was a member (held during the
period that such director was in office). See "--Committees of the Board of
Directors."
10
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS
The following individuals are the executive officers and
key management of Fundtech:
<TABLE>
<CAPTION>
NAME AGE TITLE
---- --- -----
<S> <C> <C>
Reuven Ben-Menachem 40 Chief Executive Officer and Chairman
Michael Carus 34 Executive Vice President, Chief Operating Officer and Chief
Financial Officer
Paul J. Citarella 42 Executive Vice President, Corporate Marketing
Gil Gadot 39 Executive Vice President, Head of Israeli Operations
Joseph P. Mazzetti 59 Executive Vice President, International
J. Edmund Orr III 50 Executive Vice President, Electronics Banking
</TABLE>
For a discussion of the business experience of Mr. Reuven
Ben-Menachem, see "Board of Directors".
MICHAEL CARUS has served as Executive Vice President, Chief
Operating Officer and Chief Financial Officer since July 1999. Prior to that,
Mr. Carus served as Executive Vice President and Chief Financial Officer of
Fundtech since May 1998, and as Senior Vice President and Chief Financial
Officer from September 1997 to May 1998. From May 1995 to August 1997, Mr. Carus
was employed by Geotek Communications Inc., a wireless communications solution
provider, most recently as Vice President and Acting Chief Financial Officer,
Corporate Controller and Chief Accounting Officer. From 1988 to 1995, Mr. Carus
was employed by Coopers & Lybrand as a Certified Public Accountant, most
recently in the position of Manager - Business Assurance.
PAUL J. CITARELLA has served as Executive Vice President,
Corporate Marketing, since July 1999. Prior to that, Mr. Citarella served as
Senior Vice President and General Manager of the Electronic Banking Division of
Fundtech since April 1998. Mr. Citarella held the same position at Checkfree
Corporation where he was employed from 1996 to April 1998. From 1985 to 1995,
Mr. Citarella was employed by Unisys Corporation, an information technology
solutions provider, where he held management and sales positions with that
company's Financial Services Division.
GIL GADOT has served as Executive Vice President of
Technology and regional General Manager Israel Operations of Fundtech since
September 1998. From 1995 until September 1998, Mr. Gadot was Senior Vice
President of Operations of Technology and U.S. Operations, and served as Vice
President of Research and Development of Fundtech since it commenced operations
in 1993 until 1995. From 1987 to 1993, Mr. Gadot was a senior project manager of
DSSI, a leading systems and software supplier. Prior thereto, Mr. Gadot served
as a senior programmer and analyst holding a rank of Captain in the Israeli Army
Computer center. Mr. Gadot has more than 18 years of software development
experience, particularly in advanced graphical user interface, operating and
real-time systems.
JOSEPH P. MAZZETTI has served as Executive Vice President,
Sales and Marketing of Fundtech. Prior to joining Fundtech, Mr. Mazzetti was
employed as an Executive Vice President at PRT Corp., a Year 2000 solution
company, from 1992 to 1994. From 1984 to 1992, Mr. Mazzetti was employed at
Logica Data Architects, most recently as Executive Vice President of the
Financial Products Group, where he had responsibility for funds transfer,
message switching and asset/liability product lines. Mr. Mazzetti has more than
30 years of experience in information technology in the public and private
sectors with concentration in the banking and financial institutions market.
J. EDMUND ORR III has served as Executive Vice President
and General Manager of the Electronic Banking Division since joining Fundtech in
July 1999. Prior to joining Fundtech, Mr. Orr was the Vice President of
Transaction Software Technologies (TST) responsible for Product Management and
11
<PAGE>
New Business Development from 1993 through 1998. Prior to joining TST, Mr. Orr
was employed by Security Pacific Bank/Bank of America from 1979 through 1993,
where he held various management positions within their Treasury Management
organization.
12
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information as of
October 23, 2000 (except as otherwise specified in the footnotes) about
beneficial ownership of Fundtech's Ordinary Shares by (i) each person who is the
beneficial owner of more than five percent (5%) of the outstanding Ordinary
Shares, (ii) all directors of the Company, (iii) the Chief Executive Officer and
the four other highest-paid executive officers employed by the Company as of
December 31, 1999 (the "Named Officers"), and (iv) all directors and executive
officers as a group, based in each case on information furnished to the Company.
The address of each person who is an officer or director of the Company is c/o
Fundtech Ltd., 12 Ha'hilazon Street, Ramat Gan, Israel.
<TABLE>
<CAPTION>
NUMBER OF ORDINARY SHARES PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED BENEFICIALLY OWNED
------------------------------------ ------------------ ------------------
<S> <C> <C>
Aura Investments Ltd.(1)............................................ 1,055,000 .44%
Clal Industries and Investments ("CII")(2).......................... 3,833,497 27.04%
Rimon Ben-Shaoul(3)................................................. 3,845,497 27.10%
Reuven Ben-Menachem(4).............................................. 384,900 2.71%
George Lieberman.................................................... 10,500 2.6%
Jay B. Morrison(5).................................................. 12,749 *
Achi Racov.......................................................... 6,000 *
Rina Shainski....................................................... 9,000 *
Gil Weiser.......................................................... 0 *
Michael Carus(6).................................................... 30,331 *
Paul Citarella(7)................................................... 27,250
Gil Gadot(8)........................................................ 140,206 1%
Joseph P. Mazzetti(9)............................................... 33,562 *
J. Edward Orr III(10)............................................... 9,600 *
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (12 PERSONS) 4,509,595 31.4%
</TABLE>
----------------------------------------
* Less than one percent
(1) Consists of 1,055,000 Ordinary Shares held by Aura Investments Ltd.
("Aura").
(2) Consists of 3,833,497 Ordinary Shares held by CII, of which Mr.
Ben-Shaoul is President. The address of CII is Clal Atidim Tower,
Building No. 4, Tel Aviv 61581, Israel.
(3) Includes 3,845,497 Ordinary Shares owned by CII, of which Mr.
Ben-Shaoul is President. Mr. Ben-Shaoul disclaims beneficial ownership
of the Ordinary Shares held by CII. Also includes options to purchase
12,000 Ordinary Shares granted pursuant to the Directors' Option Plan.
(4) Includes options to purchase 12,000 Ordinary Shares granted pursuant to
the Directors' Option Plan. Also includes 13,750 Ordinary Shares
issuable upon the exercise of employee options held by Mr.
Ben-Menachem.
(5) Includes 607 Ordinary Shares held by Jay Morrison and 142 Ordinary
Shares held by Newbury Investors Inc. of which Mr. Morrison is a 50%
shareholder. Mr. Morrison disclaims beneficial ownership of such
Ordinary Shares held by Newbury Investors Inc. except to the extent of
his proportionate pecuniary interest therein. Also includes options to
purchase 12,000 Ordinary Shares granted pursuant to the Directors'
Option Plan.
13
<PAGE>
(6) Consists of 30,331 Ordinary Shares issuable upon the exercise of
employee options held by Mr. Carus.
(7) Consists of 27,250 Ordinary Shares issuable upon the exercise of
employee options held by Mr. Citarella.
(8) Includes 9,375 Ordinary Shares issuable upon the exercise of employee
options held by Mr. Gadot.
(9) Includes 33,062 Ordinary Shares issuable upon the exercise of employee
options held by Mr. Mazzetti.
(10) Includes 9,500 Ordinary Shares issuable upon the exercise of employee
options held by Mr. Orr.
14
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
During 1999, Mr. Ariu Levi, who was the President of
Fundtech Corp. for most of 1999, failed to timely file with the Securities and
Exchange Commission (the "SEC") seven Forms 4 relating to seven transactions;
Mr. Paul Citarella, who is Executive Vice President, Corporate Marketing failed
to timely file with the SEC one Form 3 and one Form 4 relating to one
transaction; Mr. J. Edmund Orr III, who is Executive Vice President and General
Manager, Electronic Banking failed to timely file with the SEC one Form 3 and
one Form 4 relating to one transaction; Mr. George M. Lieberman, who is a
Director, failed to timely file with the SEC one Form 4 relating to one
transaction; and Mr. Jay B. Morrison, who is a Director, failed to timely file
with the SEC one Form 4 relating to one transaction.
EXECUTIVE COMPENSATION
The following table sets forth information concerning total
compensation earned by or paid to the Named Officers during the fiscal years
indicated for services rendered to the Company and its subsidiary.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
SECURITIES
ANNUAL COMPENSATION UNDERLYING ALL OTHER
NAME & PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION(1)
-------------------------------------- ------------- ------------- ------------- --------------- -----------------
<S> <C> <C> <C> <C> <C>
Reuven Ben-Menachem................... 1999 $ 200,000 $ 65,000 6,000(2) 2,447
Chief Executive Officer, President 1998 165,417 140,000 21,000(3) 2,954
and Chairman 1997 141,246 5,000 -- 2,866
Gil Gadot............................. 1999 107,878 45,000 -- 5,406
Executive Vice President - 1998 115,000 20,000 10,000 2,954
Technology, General Manager 1997 90,000 20,000 -- 2,866
Israeli Operations
Joseph P. Mazzetti.................... 1999 160,000 18,000 -- 2,447
Executive Vice President - Sales 1998 146,875 25,000 15,000 2,866
and Marketing 1997 110,000 10,000 10,500 3,300
Michael Carus......................... 1999 160,000 43,000 -- 2,447
Executive Vice President, Chief 1998 145,833 40,000 15,000 2,954
Operating Officer and Chief 1997 40,833 -- 60,000 716
Financial Officer
Paul Citarella........................ 1999 145,000 50,000 12,000 2,447
Executive Vice President - 1998(4) 79,000 10,000 50,000 1,969
Corporate Marketing 1997 -- -- -- --
</TABLE>
----------
(1) Represents relocation, housing and health insurance premiums.
(2) Includes 6,000 options granted pursuant to the Director's Option Plan.
(3) Includes 6,000 options granted pursuant to the Director's Option Plan
and 15,000 options granted pursuant to Fundtech's employee option
plans.
(4) Joined Fundtech Corporation in April 1998.
No other annual compensation, stock appreciation rights,
long-term restricted stock awards or long-term incentive plan payouts were
awarded to, earned by, or paid to the executive officers above during any of
Fundtech's last three fiscal years.
15
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Stock options exercisable for Ordinary Shares are granted
to certain employees of the Company pursuant to the Company's share option plans
in order to secure and retain the services of highly qualified persons by
rewarding key employees for their contribution toward increasing the value of
the Company's Ordinary Shares. The following table provides information on
options granted to the Named Officers during the last fiscal year pursuant to
the Company's option plans.
The table also shows, among other data, hypothetical
potential gains from options granted in fiscal 1999. These hypothetical gains
are based entirely on assumed annual growth rates of 5% and 10% in the value of
the price of Ordinary Share over the life of the options granted in Fiscal 1999.
The assumed rates of growth were selected by the SEC for illustrative purposes
only, and are not intended to predict future stock prices, which will depend
upon market conditions and the Company's future performance and prospects.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
NUMBER % OF TOTAL STOCK PRICE APPRECIATION
OF OPTIONS/SARS EXERCISE FOR OPTION TERM
OPTIONS/SARS GRANTED TO ALL PRICE PER EXPIRATION ----------------------
NAME OF EXECUTIVE GRANTED EMPLOYEES(3) SHARE($/SH)(4) DATE 5% 10%
----------------- ------- ------------ -------------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Reuven Ben-Menachem......... 6,000(1) 1.1% $22.31 09/30/04 $36,988 $81,734
Paul J. Citarella........... 12,000(2) 2.3% $13.25 10/28/04 $43,929 $97,071
</TABLE>
(1) Each option represents the right to purchase one Ordinary Share. These
options were granted pursuant to Fundtech's Directors' Option Plan on
September 30, 1999. The options vest at a rate of 25% every three
months.
(2) Each option represents the right to purchase one Ordinary Share. These
options were granted pursuant to the Fundtech Ltd. 1999 Employee Option
Plan on October 28, 1999. The options vest at a rate of 12.5% every six
months.
(3) In the year ended December 31, 1999, we granted options to employees
and directors to purchase an aggregate of 528,075 Ordinary Shares,
including options to purchase an aggregate of 49,500 Ordinary Shares
granted to Fundtech's directors.
(4) The exercise price on the date of grant was equal to 100% of the fair
market value of the Ordinary Shares on the date of grant.
16
<PAGE>
FISCAL YEAR-END OPTION HOLDINGS
The following table summarizes for each of the Named
Officers option exercises during fiscal 1999, including the aggregate value of
gains on the date of exercise, the total number of unexercised options for
Ordinary Shares, if any, held at December 31, 1999 and the aggregate dollar
value of unexercised in-the-money options for Ordinary Shares, if any, held at
December 31, 1999. Value of unexercised in-the-money options at fiscal year-end
is the difference between the exercise or base price of such options and the
fair market value of the underlying Ordinary Shares on December 31, 1999, which
was $20.50 per share. These values have not been, and may never be, realized, as
these options have not been, and may never be, exercised. Actual gains, if any,
upon exercise will depend on the value of Ordinary Shares on the date of any
exercise of options.
AGGREGATED OPTION/SAR EXERCISES IN THE LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
(AT YEAR END)
NUMBER OF UNEXERCISED IN-THE MONEY OPTIONS
ORDINARY SHARES OPTIONS AT FISCAL YEAR-END (#) AT FY-END ($)
ACQUIRED VALUE ----------------------------- ----------------------------
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Reuven Ben-Menachem........ 3,000(1) 60,135 8,250(2) 15,000 $ 63,383 $133,125
Paul Citarella............. 7,000 157,500 11,750 43,250 73,438 282,313
Joseph Mazzetti............ 15,000 336,612 22,312 15,188 363,991 167,459
Michael H. Carus.......... 12,500 313,687 18,750 33,750 290,831 486,169
Gil Gadot.................. 5,500 150,122 30,002(3) 7,500 521,899 66,563
</TABLE>
-----------------------
(1) Includes 3,000 options exercised by his wife.
(2) Includes 2,250 options held by his wife.
(3) Includes 3,000 options held by his wife.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee for the fiscal
year ended December 31, 1999 were Ms. Rina Shainski, Mr. Achi Racov and Mr. Jay
B. Morrison. No member of the Compensation Committee is an officer or employee
of Fundtech. The responsibilities of the Compensation Committee include
administering Fundtech's stock option plans and approving the base compensation
of Mr. Reuven Ben-Menachem.
STOCK OPTION PLANS
Fundtech has established five plans for granting options to
employees of the company and its subsidiaries and one plan for granting options
to the directors of the company: the Fundtech Ltd. 1996 Employee Stock Option
Plan for the Employees of Fundtech Ltd. (the "102 Plan"); the Fundtech Ltd. 1996
Stock Option Plan for Fundtech Corporation (the "1996 U.S. Plan"); the Fundtech
Ltd. 1997 Stock Option Plan for Fundtech Corporation (the "1997 U.S. Plan"); the
Fundtech Ltd. 1997 Israeli Share Option Plan (the "1997 Israel Plan"); the
Fundtech Ltd. 1999 Employee Option Plan (the "1999 Option Plan"); and the
Fundtech Ltd. Directors' Option Plan (the "Directors' Option Plan").
Pursuant to resolutions of Fundtech's Board of Directors
adopted on March 26, 1999, September 30, 1999 and April 17, 2000 (the
"Reservation Resolutions"), a total of 2,068,000 Ordinary Shares have been
reserved for the granting of options to employees of Fundtech Ltd. and Fundtech
Corporation and directors of Fundtech Ltd. At a meeting held on September 7,
1999 (the "Ratifying Resolutions"), the shareholders ratified the reservation
and allocation of 1,868,000 Ordinary Shares for granting of options to employees
17
<PAGE>
of Fundtech Ltd. and Fundtech Corporation and directors of Fundtech Ltd. As set
forth in Proposal 6 below, Fundtech is seeking the approval of its shareholders
of the additional reservation of Ordinary Shares. As of October 1, 2000,
1,540,696 options were outstanding, 344,462 options have been exercised and
182,842 options are available to be issued. These options have been reserved and
granted pursuant to the following plans:
1996 STOCK OPTION PLANS
The 102 Plan was adopted in May 1996 and provides for the
granting of options under Section 102 of the Israel Income Tax Ordinance
("Section 102"). Pursuant to Section 102 and the rules promulgated thereunder
(including the requirement that the options and/or the resulting shares be
deposited with a trustee for at least two years), the tax on the benefit arising
to the employee from the grant and exercise of options as well as from the
allotment of Ordinary Shares under these options is deferred until the transfer
of the options and/or Ordinary Shares to the employee's name or upon sale of
those options and/or Ordinary Shares. Fundtech will be allowed to claim as an
expense for tax purposes the amounts credited to the employees as a benefit upon
sale of the shares allotted under the plan at a price exceeding the exercise
price when the related capital gains tax is payable by the employee. The options
granted under the 102 Plan vest over a period of four years and expire four
years from the date of grant. Pursuant to the Reservation Resolutions, 120,753
Ordinary Shares were reserved and allocated to the 102 Plan. Of the 120,573
options available for grant under the 102 Plan, as of October 1, 2000, no
options were outstanding, 112,504 options have been exercised, and 8,249 options
remain available to be issued.
The 1996 U.S. Plan was adopted in October 1996. The options
granted under the 1996 U.S. Plan vest over a period of four years and expire
five years from the date of grant. Pursuant to the Reservation Resolutions and
the Ratifying Resolutions, 235,500 Ordinary Shares were reserved and allocated
to the 1996 U.S. Plan. Of the 235,500 options available for grant under the 1996
U.S. Plan, as of October 1, 2000, 121,719 options were outstanding, 94,748
options have been exercised, and 19,033 options remain available to be issued.
1997 STOCK OPTION PLANS
The 1997 U.S. Plan was adopted in September 1997. The
options granted under the 1997 U.S. Plan vest over a period of four years and
expire five years from the date of grant. Pursuant to the Reservation
Resolutions and the Ratifying Resolutions, 626,747 Ordinary Shares were reserved
and allocated to the 1997 U.S. Plan. Of the 626,747 options available for grant
under the 1997 U.S. Plan, as of October 1, 2000, 512,247 options were
outstanding, 104,528 options have been exercised, and 9,972 options remain
available to be issued.
The 1997 Israel Plan was adopted in December 1997. The
options granted under the 1997 Israel Plan vest over a period of four years and
expire five years from the date of grant. Pursuant to the Reservation
Resolutions, 475,000 Ordinary Shares were reserved, 275,000 of which were
reserved and allocated pursuant to the Ratifying Resolutions to the 1997 Israel
Plan. Of the 475,000 options available for grant under the 1997 Israel Plan, as
of October 1, 2000, 367,733 options were outstanding, 25,017 options have been
exercised, and 82,250 options remain available to be issued.
1999 STOCK OPTION PLAN
The 1999 Option Plan was adopted in September 1999. The
options granted under the 1999 Option Plan vest over a period of four years and
expire five years from the date of grant. Pursuant to the Reservation
Resolutions and the Ratifying Resolutions, 500,000 Ordinary Shares were reserved
and allocated to the 1999 Option Plan. Of the 500,000 options available for
grant under the 1999 Option Plan, as of October 1, 2000, 452,620 options were
outstanding, 9,915 options have been exercised, and 37,465 options remain
available to be issued.
18
<PAGE>
DIRECTORS' OPTION PLAN
The Directors' Option Plan was adopted in May 1998. 42,000
Ordinary Shares were reserved and granted following the election of a Board of
Directors at Fundtech's annual general meeting of the shareholders in August
1998. An additional 49,500 were granted following the 1999 annual meeting of the
shareholders in September, 1999. These options vest over a period of one year
and expire five years from the date of grant. Pursuant to the Ratifying
Resolutions, an additional 68,000 Ordinary Shares were reserved and allocated to
the Directors' Option Plan. Of the 110,000 options available for grant under the
Directors' Option Plan, as of October 1, 2000, 79,500 options were outstanding,
no options have been exercised, and 30,500 options remain available to be
issued.
EMPLOYMENT AGREEMENTS, TERMINATION PROVISIONS AND CHANGE IN CONTROL ARRANGEMENTS
On November 25, 1997, Fundtech entered into an employment
agreement with Reuven Ben-Menachem engaging him as the Chief Executive Officer
of Fundtech and of Fundtech Corporation. The initial term of Mr. Ben-Menachem's
employment commenced on January 1, 1998 and continued until December 31, 1999,
unless renewed. The Compensation Committee renewed Mr. Ben-Menachem's agreement
for an additional year, through December 31, 2000, at an annual base salary of
$225,000 and eligibility for bonuses based on Fundtech's achievement of certain
performance goals. Fundtech may terminate Mr. Ben-Menachem employment without
cause, in which case Mr. Ben-Menachem would receive severance payment in the
amount equal to his then current base salary for a period of six (6) months,
plus the pro-rata portion of his bonus for such year. Mr. Ben-Menachem's base
salary is reviewed annually and any increases to his base salary require the
approval of the Compensation Committee. Mr. Ben-Menachem's employment agreement
incorporates a non-competition and confidentiality agreement entered into on
February 2, 1995.
Fundtech does not currently have any written employment
contracts in effect with any of the Named Officers other than Reuven
Ben-Menachem, its chief executive officer.
COMPENSATION COMMITTEE REPORT
The Compensation Committee administers the stock option
plans of Fundtech and its subsidiaries, determines the base compensation and
bonus/incentive compensation of the Chief Executive Officer of Fundtech, Reuven
Ben-Menachem, and reviews the recommendations of Reuven Ben-Menachem and
approves the base compensation and bonus/incentive compensation of the other
executive officers of Fundtech. In anticipation of its April 2000 meeting, the
Compensation Committee commissioned a competitive compensation analysis/report
from Towers Perrin. The peer companies were selected based on industry
(software), market capitalization and projected growth patterns. The
Compensation Committee has set the executive officers' total compensation at the
current levels in an attempt to raise their compensation to the median group of
the peer companies.
General Compensation Policy
The Committee's fundamental compensation policy is to make
a substantial portion of executive officers' compensation contingent on
Fundtech's growth, financial performance and meeting certain specific targeted
events. Accordingly, in addition to base salary, we offer bonuses/incentive
compensation (which are tied to Fundtech's and the executive's performance
goals) and stock option awards. The Committee believes that providing incentives
to the executive officers through both cash bonus and equity based incentives
(stock options in Fundtech) benefits shareholders by aligning the long-term
interests of shareholders and employees.
Each executive officers compensation package consists of:
(i) salary, (ii) benefits, which include medical, dental, life insurance and
participation in a 401(k) plan and (iii) may include either or both stock
19
<PAGE>
options under the relevant stock option plan of Fundtech and/or its subsidiaries
and/or eligibility for incentive compensation.
Factors
The principal factors considered in establishing the
components of each executive officer's compensation package for the 2000 fiscal
year are summarized in this report. The Committee may, in its discretion, apply
entirely different factors, particularly different measures of financial
performance, in setting executive officers' compensation for future fiscal
years. However, all compensation decisions will be designed to further the
general compensation policy indicated above.
Base Salary
The base salary for each executive officer is set on the
basis of personal performance, the salary levels in effect for comparable
positions in companies similarly situated with Fundtech and the financial
performance of Fundtech. In preparing the performance graph for this Proxy
Statement, the Company used Hambrecht & Quist Computer Software Index ("H & Q
Index") as its published line of business index. The compensation practices of
most of the companies in the H & Q Index were not reviewed by the Committee, as
such companies were not believed to compete with the Company for executive
talent. The Committee based its practices on the analysis/report commissioned
from Towers Perrin.
Factors relating to individual performance that are
assessed in setting base compensation are based on particular duties, areas of
responsibility of the individual executive officer and internal consistency
within the Fundtech's salary structure. Factors relating to our financial
performance that may be related to increasing or decreasing base salary include
revenues, profits and meeting strategic objectives for future growth. The
establishment of base compensation involves a subjective assessment and weighing
of the foregoing criteria and is not based on any specific formula.
Incentive Compensation
Assessment of any adjustment to bonuses earned is
determined by the Committee. Bonuses have only been paid on achieving
performance thresholds, based either on specific events or meeting revenue or
profit targets previously established by the Board. The corporate goals and
threshold level may differ from year to year, but are always aligned with the
objective of improving shareholder value. The bonus targets for fiscal year 2000
were based on the commissioned analysis/report.
Stock Options
Stock options are an essential element of Fundtech's
executive compensation package. The Committee believes that equity-based
compensation in the form of stock options aligns the interests of management
with those of the shareholders by focusing employees and management on
increasing stockholder value. The value of such equity-based compensation
derives solely from appreciation of Fundtech's stock. In order to promote a
longer term management focus and to provide incentive for continued employment
with Fundtech, stock option grants generally become exercisable over a four year
vesting schedule, with the exercise price being equal to the fair market value
of Fundtech's stock on the date of grant.
The size of the option grant made to each executive officer
is based upon that individual's current position with Fundtech, internal
comparability with option grants made to other executives (generally taking into
account stock volatility and recent stock appreciation) and the individual's
potential for future responsibility and promotion over the option term. Fiscal
year 2000 option grants to executive officers were determined based on the
commissioned report/analysis and were consistent with the Committee's objective
of raising executive officers' total compensation to the median levels of
Fundtech's group of peer companies.
20
<PAGE>
CEO Compensation
On November 25, 1997, Fundtech entered into an employment
agreement with Reuven Ben-Menachem engaging him as the Chief Executive Officer
of Fundtech and of its U. S. subsidiary, Fundtech Corporation. Pursuant to his
employment agreement, Mr. Ben-Menachem received a base salary of $200,000 for
1999. Mr. Ben-Menachem received incentive bonuses for 1999 totaling $65,000. In
addition, on Sepember 30, 1999, Mr. Ben Menachem received 6,000 stock options as
a director of the Company. The directors' options vest at the rate of 25% every
three months. All options were priced at the fair market value of Fundtech's
Ordinary Share on the date of grant.
Ms. Rina Shainski
Mr. Achi Racov
Dr. Jay B. Morrison
21
<PAGE>
PERFORMANCE GRAPH
The following graph provides a comparison of the cumulative
total returns on the Ordinary Shares based on an investment of $100 after the
close of the market on March 13, 1998 (the date that the Ordinary Shares
commenced trading), plotted on a monthly basis for the period ending on December
31, 1999, against the NASDAQ Market Index and the H&Q Computer Software Index,
in each case assuming reinvestment of any dividends. Dividends have not been
declared on the Ordinary Shares. The following graph is not, nor is it intended
to be, indicative of future performance of the Company's Ordinary Shares which
performance could be affected by factors and circumstances outside of the
Company's control.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
FUNDTECH, H&Q COMPUTER SOFTWARE INDEX AND THE NASDAQ MARKET INDEX
------------------------------------------------------------------------
SCALED PRICES: Stock and index prices scaled to 100 at 3/13/98
<TABLE>
<CAPTION>
DATES Fundtech, Ltd Nasdaq Stock Market -U.S. Chase H&Q Computer Software Sector
----- ------------- ------------------------- ----------------------------------
<S> <C> <C> <C>
3/13/98 100.00 100.00 100.00
Mar-98 138.46 103.75 104.83
Apr-98 162.50 105.50 105.24
May-98 141.83 99.63 101.20
Jun-98 145.19 106.60 108.67
Jul-98 131.73 105.35 102.58
Aug-98 98.08 84.47 79.06
Sep-98 82.69 96.19 90.64
Oct-98 104.81 100.41 87.32
Nov-98 130.77 110.62 97.05
Dec-98 158.65 124.99 105.50
Jan-99 169.23 143.13 111.58
Feb-99 160.58 130.32 103.21
Mar-99 231.73 140.17 105.45
Apr-99 264.90 144.69 99.66
May-99 246.15 140.68 106.29
Jun-99 199.52 153.34 120.36
Jul-99 195.19 150.57 116.79
Aug-99 177.88 156.92 120.56
Sep-99 171.63 157.14 133.69
Oct-99 102.88 169.74 149.23
Nov-99 137.02 190.38 179.17
Dec-99 157.69 232.25 240.04
</TABLE>
22
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
OPTION GRANTS
On September 30, 1999, Fundtech granted options to purchase
an aggregate of 49,500 Ordinary Shares at an exercise price of $22.31 per share
to members of the Board of Directors. These grants were made following the
election of a Board of Directors at Fundtech's annual meeting of the
shareholders on September 7, 1999. 7,500 of these options were granted to two
members of the Board, who had served on the Board for a portion of the previous
year and had not previously received options. These 7,500 options were fully
vested when granted. The remaining options vest over a period of one year and
expire five years from the date of grant.
On October 28, 1999, Fundtech granted certain executive
officers options to purchase an aggregate of 62,000 Ordinary Shares at an
exercise price of $13.25 per share. Such options vest over four years (from the
date of hire for new employees and from the date of grant for old employees) and
expire five years from the date of grant.
PROPOSAL 2 - APPROVAL OF THE CONTINUED SERVICE OF MR. REUVEN BEN-MENACHEM AS
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
Under Israel's Companies Law, in order for the same
individual to serve simultaneously as Chairman of the Board and Chief Executive
Officer of a publicly-held company, the affirmative vote of a majority of the
Ordinary Shares present at an annual meeting (which such majority must include
at least two-thirds of the shares of non-controlling shareholders) is required.
Mr. Reuven Ben-Menachem has served in these dual capacities since 1998. The
approval of the simultaneous service of Mr. Ben-Menachem in these capacities
shall be effective for three years. Mr. Ben-Menachem shall continue to be
subject to re-election to the Board of Directors on an annual basis.
The affirmative vote of the holders of a majority of the
voting power represented at the meeting in person or by proxy is necessary for
approval of the continued service of Mr. Ben-Menachem as Chairman of the Board
and Chief Executive Officer.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL
OF THE CONTINUED SERVICE OF MR. BEN-MENACHEM AS CHAIRMAN OF THE BOARD AND CHIEF
EXECUTIVE OFFICER FOR THE NEXT THREE YEARS.
PROPOSAL 3 - RATIFICATION AND APPROVAL OF THE INCREASE IN THE NUMBER OF ORDINARY
SHARES RESERVED UNDER THE FUNDTECH LTD. DIRECTORS' OPTION PLAN
Fundtech has used the Directors' Option Plan as a means to
encourage and provide incentives to individuals to serve as members of the Board
of Directors by enabling Fundtech to attract and retain, for its benefit, highly
qualified Directors. The Directors' Option Plan currently authorizes options to
purchase 110,000 Ordinary Shares to be issued. As of October 1, 2000 there were
27,000 Ordinary Shares remaining available for grant under the Directors' Option
Plan.
The Board of Directors is proposing to increase the number
of authorized Ordinary Shares reserved for issuance under the Directors' Option
Plan by 27,000 Ordinary Shares to a total of 137,000 Ordinary Shares reserved
under the Directors' Option Plan in order to continue to provide this important
compensation element. Subject to shareholder approval of this proposal and
proposals 3 and 4, the Board will grant to each of the directors elected at the
annual meeting options to purchase 6,000 Ordinary Shares. These options will be
23
<PAGE>
issued at the fair market value (the "Fair Market Value") of the Ordinary Shares
on the date of grant (the "Grant Date"), which shall be the date of the Annual
Meeting. The benefits of these grants are not currently determinable.
TERMS OF THE DIRECTORS' OPTION PLAN
The Compensation Committee administers the Directors'
Option Plan. Under the Directors' Option Plan, the Committee has sole authority
in its discretion, subject to the express provisions of the Directors' Option
Plan, to determine the exercise price of the Ordinary Shares covered by each
option, the number of Ordinary Shares subject to each option and the extent to
which options may be exercised in installments, and the terms and provisions of
the respective option agreements.
Currently, a total of 110,000 Ordinary Shares, subject to
certain adjustments, are reserved for issuance under the Directors' Option Plan.
The plan provides that if any options shall terminate for any reason or expire
without having been exercised in full, the Ordinary Shares not purchased under
such options shall again be available for the purposes of the Plan.
The grant date for each option granted under the plan is
the date that the Director is elected to the Board of Directors, and the term of
the options is generally five years from the grant date. Options are vested in
phases and subject to the specific terms provided by the Directors' Option Plan
become fully vested at the date of the first Annual Meeting accruing after the
grant date.
The Board of Directors may, from time to time, amend the
Directors' Option Plan in any respect. However, no amendment may be made without
the approval of the Company's shareholders if shareholder approval is required
for such amendment under applicable law.
The affirmative vote of the holders of a majority of the
voting power represented at the meeting in person or by proxy is necessary for
ratification and approval of the increase of number of Ordinary Shares reserved
under the Directors' Option Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
RATIFICATION AND APPROVAL OF THE INCREASE OF 27,000 ORDINARY SHARES RESERVED
UNDER THE DIRECTORS' OPTION PLAN.
PROPOSAL 4 - APPROVAL OF FUNDTECH'S DIRECTORS' COMPENSATION FOR 2000
Under applicable Israeli law, the Shareholders must approve
the payment of compensation and fees to Fundtech's Directors. Pursuant to
certain regulations promulgated under the Companies Law, the fees payable to
external directors must be within specific ranges of sums specified in certain
schedules thereto. However, other regulations promulgated under the Companies
Law provide that companies, such as us, whose shares have been offered to the
public outside of Israel may determine that the fees payable to external
directors may be set other than in accordance with these schedules, so long as
the fees are not less than the minimum amount set forth in the schedules and not
greater than the average compensation paid to other directors serving on the
board. Pursuant to Proposal 3, Shareholders are being asked to approve an
increase in the number of Ordinary Shares reserved for issuance under the
Directors' Option Plan. Upon approval of Proposal 3 at the Annual Meeting,
Shareholders will be asked to approve the following for 2000 and through the
2001 Annual Meeting:
1. Each of the Directors, including the external directors, will be granted
an option to purchase 6,000 Ordinary Shares at an exercise price equal to
the Fair Market Value of such Ordinary Shares on the Grant Date, which
option shall vest as follows:
(a) during the first nine months following the Grant
Date, options to purchase 1,500 Ordinary Shares shall vest on the day
following the end of each consecutive three-month period, respectively,
during which such Director serves continuously as a Director of the
Company; and
24
<PAGE>
(b) an additional 1,500 Ordinary Shares shall vest on
the date of the first Annual Meeting following the Grant Date if such
Director serves continuously as a Director during the period commencing
nine months from the Grant Date until the date of the first Annual Meeting
occurring thereafter.
2. All Directors, including the external directors, elected or appointed
other than at an Annual Meeting shall receive an option to purchase a pro
rata portion of 6,000 Ordinary Shares (1,500 for each three month period
or portion of three month period in which such director is expected to
serve) at an exercise price equal to the Fair Market Value of such
Ordinary Shares on the date such Director is elected or appointed (the
"Election Date"). 1,500 Ordinary Shares shall vest on the day following
the end of each consecutive three-month period following the Election Date
during which such Director serves continuously as a Director of the
Company, and up to 1,500 Ordinary Shares shall vest pro-rata for any
additional period of such continuous service prior to the next Annual
Meeting.
3. The term of the options shall be five years from the date of grant. The
plan provides that if options terminate for any reason or expire without
having been exercised in full, the Ordinary Shares not purchased under
such options shall again be available for the purposes of the plan. The
Compensation Committee shall determine other conditions of the grants,
including, but not limited to, the exercise period for options vested
thereunder.
The affirmative vote of the holders of a majority of the
voting power represented at the meeting in person or by proxy is necessary for
approval of the Directors' compensation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL
OF THE DIRECTORS' COMPENSATION AS SET FORTH ABOVE.
PROPOSAL 5 - RATIFICATION AND APPROVAL OF THE COMPENSATION AND OPTION AWARDS OF
MR. REUVEN BEN-MENACHEM, A MEMBER OF THE COMPANY'S BOARD OF DIRECTORS AND
FUNDTECH'S CHIEF EXECUTIVE OFFICER
Under applicable Israeli law, the Shareholders must approve
the payment of compensation and fees to Fundtech's Directors. Accordingly, at
the Annual Meeting, Shareholders will be asked to ratify and approve that, in
accordance with the terms of Mr. Ben-Menachem's employment agreement, Mr.
Ben-Menachem in his capacity of Fundtech's Chief Executive Officer shall receive
a base salary of $225,000 and other incentives for 2000 as determined by the
Compensation Committee. Subject to ratification and approval of Proposals 3 and
4, Mr. Ben-Menachem shall be granted options to purchase 6,000 Ordinary Shares
pursuant to the Company's Directors' Option Plan. In addition, on April 17,
2000, the Compensation Committee adopted a resolution granting Mr. Ben-Menachem
options to purchase 50,000 Ordinary Shares pursuant to Fundtech's 1997 U.S.
Plan. All such options have an exercise price equal to the Fair Market Value of
such Ordinary Shares on the Grant Date. The terms of these options will be the
same as the terms of the other options being granted under the respective plans
and proposals.
The affirmative vote of the holders of a majority of the
voting power represented at the meeting in person or by proxy is necessary for
ratification and approval of Mr. Reuven Ben-Menachem's compensation and Option
Awards.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
RATIFICATION AND APPROVAL OF THE COMPENSATION AND OPTION AWARDS OF MR. REUVEN
BEN-MENACHEM AS SET FORTH ABOVE.
25
<PAGE>
PROPOSAL 6 - RATIFICATION AND APPROVAL OF THE INCREASE OF ORDINARY SHARES
RESERVED UNDER THE 1997 ISRAEL PLAN AND UNDER THE 1999 OPTION PLAN
BACKGROUND
Fundtech has used the 1997 Israel Plan and the 1999 Option
Plan as means of attracting and retaining highly qualified employees by aligning
the employees' interest with those of Fundtech's other Shareholders. As of
October 1, 2000 there were 82,250 Ordinary Shares remaining available for grant
under the 1997 Israel Plan and 37,465 Ordinary Shares remaining available for
grant under the 1999 Option Plan.
For a summary of the material terms of the 1997 Israel Plan
and the 1999 Option Plan, see "Executive Compensation - Stock Option Plans."
The Board of Directors is proposing that the shareholders
vote to increase the number of authorized Ordinary Shares reserved for issuance
under the 1997 Israel Plan by 475,000 Ordinary Shares to a total of 750,000
Ordinary Shares. In addition, the Board of Directors is proposing that the
shareholders vote to increase the number of authorized Ordinary Shares reserved
for issuance under the 1999 Option Plan by 448,000 Ordinary Shares to a total of
948,000 Ordinary Shares. It has become common practice for companies in
high-tech industries, many of which compete with the Company for attracting and
retaining highly qualified employees, to offer such employees options to
purchase a large number of shares of the capital stock of such companies. The
Board of Directors is seeking to increase the number of Ordinary Shares
available for issuance under the 1997 Israel Plan and the 1999 Option Plan to
allow the Company to remain competitive with such other companies in attracting
and retaining highly qualified employees by granting such employees options to
purchase a larger number of Ordinary Shares.
The Compensation Committee intends to use the additional
475,000 Ordinary Shares, the reservation of which the Board of Directors has
requested the shareholders to ratify, for issuance upon exercise of options
granted to the Named Officers and other current and future employees of the
Company pursuant to the 1997 Israel Plan. For grants to the Chief Executive
Officer, please see Proposal 5. In addition, the Named Officers (exclusive of
the Chief Executive Officer) received the following grants: Gil Gadot received
14,586 options, Joseph Mazzetti received 17,507 options; and Michael Carus
received 21,943 options. All of these options were granted on April 17, 2000 at
an exercise price of $19.50. The Compensation Committee currently intends to use
the remaining options for other current and future employees.
The Compensation Committee intends to use the additional
448,000 Ordinary Shares, the reservation of which the Board of Directors has
requested the shareholders to ratify and approve, for issuance upon exercise of
options granted to current and future employees pursuant to the 1999 Option
Plan.
The affirmative vote of the holders of a majority of the
voting power represented at the meeting in person or by proxy is necessary for
ratification and approval of the amendments in the number of Ordinary Shares
reserved under the 1997 Israel Plan and the 1999 Option Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
RATIFICATION AND APPROVAL OF (I) THE INCREASE OF 475,000 ORDINARY SHARES
RESERVED UNDER THE 1997 ISRAEL PLAN TO A TOTAL OF 750,000 ORDINARY SHARES AND
(II) THE INCREASE OF 448,000 ORDINARY SHARES RESERVED UNDER THE 1999 OPTION PLAN
TO A TOTAL OF 948,000 ORDINARY SHARES, ALL AS SET FORTH ABOVE.
PROPOSAL 7 - APPOINTMENT OF AUDITORS AND AUTHORIZING THE BOARD OF DIRECTORS TO
SET THE REMUNERATION FOR SUCH AUDITORS
Kost, Forer and Gabbay, a member of Ernst and Young
International, independent auditors, audited the financial statements of the
Company for the year ended December 31, 1999, contained in the Company's Annual
Report on Form 10-K. The audit services consisted of the firm's audit of and
report on such financial statements and other annual financial statements of the
Company and other matters.
Representatives of Kost, Forer and Gabbay are expected to
attend the Annual Meeting and will have the opportunity to make a statement if
they desire to do so and will be available to respond to appropriate questions.
Based upon the recommendation of the Audit Committee, and
subject to ratification by the Shareholders, the Board of Directors has
appointed Kost, Forer and Gabbay, independent auditors, as auditors for the
Company for the fiscal year ending December 31, 2000.
26
<PAGE>
The Board of Directors is seeking (i) the approval of the
Shareholders, as required by the Israeli Companies Law, for the appointment of
Kost, Forer & Gabbay as the independent auditors of the Company for the fiscal
year ending December 31, 2000 and (ii) the authorization by the Shareholders to
enter into an agreement to pay the fees of Kost, Forer & Gabbay as independent
auditors of the Company on terms customary for the Israeli market.
The affirmative vote of the holders of a majority of the
voting power represented at the meeting in person or by proxy is necessary for
approval of the appointment of Kost, Forer & Gabbay as independent auditors of
the Company and the authorization of the Board of Directors entering into an
agreement with Kost, Forer & Gabbay with respect to the fees for its services.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR (I) THE
APPROVAL OF THE APPOINTMENT OF KOST, FORER & GABBAY AS THE INDEPENDENT AUDITORS
OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000 AND (II) THE
AUTHORIZATION OF THE BOARD OF DIRECTORS TO ENTER INTO AN AGREEMENT TO PAY THE
FEES OF KOST, FORER & GABBAY AS INDEPENDENT AUDITORS OF THE COMPANY.
PROPOSAL 8 - AMENDMENT TO ARTICLES OF ASSOCIATION
On February 1, 2000, the Companies Law came into effect.
The Companies Law supercedes most of the provisions of the Israeli Companies
Ordinance [New Version], 5743-1983. In light of the changes to the corporate law
governing the Company, the Board of Directors recommends that the shareholders
adopt the amended and restated Articles of Association, substantially in the
form attached hereto as Appendix A.
The proposed changes to our Articles of Association
include, but are not limited to:
Restatement of the objectives of the Company from a
specific list of objectives to a general statement
allowing all types of business permitted by law.
Election of external directors in accordance with the
Companies Law;
Specifying the type of and time for notice to be given
by the Company for shareholder meetings and Board of
Directors meetings;
Removing specific provisions regarding approval of
transactions with affiliates, which shall instead be
governed by the Companies Law;
Requiring that the appointment of the Chief Executive
Officer as Chairman of the Board be approved by the
Shareholders, as required by the Companies Law;
Authorizing the Internal Auditor of the Company to
convene meetings of the Board of Directors;
Authorizing the Board of Directors to hold meetings
using electronic means of communications;
Authorizing the Board of Directors to declare all
dividends in respect of the Company's shares of capital
stock; and
27
<PAGE>
Authorizing the Shareholders to approve the appointment
of outside auditors of the Company to serve for three
years, and allowing the Board of Directors to set the
fees of the outside auditors in certain instances;
The list above does not purport to be complete, and shareholders are urged to
review the form of Articles of Association set forth in Appendix A.
The affirmative vote of the holders of 75% of the voting
power represented at the meeting in person or by proxy is necessary for approval
of the amendment of the Articles of Association of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL
AND ADOPTION OF THE AMENDED AND RESTATED ARTICLES OF ASSOCIATION OF THE COMPANY
IN THE FORM ATTACHED HERETO AS APPENDIX A.
PROPOSALS OF SHAREHOLDERS
The Company intends to hold the Annual Meeting of
Shareholders for fiscal year 2000 in the fall of next year. Any shareholder of
the Company wishing to include proposals in the proxy materials for such meeting
must meet the requirements of the rules of the SEC relating to shareholders'
proposals. Such proposal must be received by the Secretary of the Company in
writing at the principal executive offices of the Company prior to June 22,
2001.
OTHER BUSINESS
The Board of Directors of the Company is not aware of any
other matters that may be presented at the Annual Meeting other than those
mentioned in the attached Company's Notice of Annual Meeting of Shareholders. If
any other matters do properly come before the Annual Meeting, it is intended
that the persons named as proxies will vote, pursuant to their discretionary
authority, according to their best judgment in the interest of the Company.
ADDITIONAL INFORMATION
All of the expenses involved in preparing, assembling and
mailing this Proxy Statement and the accompanying materials will be paid by the
Company. In addition to solicitation by mail, directors, officers and regular
employees of the Company may solicit proxies by telephone, telegram or by
personal interviews. Such persons will receive no additional compensation for
such services. The Company will reimburse brokers and certain other persons for
their charges and expenses in forwarding proxy materials to the beneficial
owners of Ordinary Shares.
Copies of the Company's 1999 Annual Report to Shareholders
are being mailed to the shareholders simultaneously with this Proxy Statement.
The financial statements and financial information appearing in such Annual
Report are incorporated by reference herein.
By Order of the Board of Directors,
Michael S. Hyman
Vice President, General Counsel and Secretary
Ramat Gan, Israel
November 9, 2000
28
<PAGE>
APPENDIX A
Amended and Restated Articles of Association
<PAGE>
THE COMPANIES LAW - 1999
A COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
OF
FUNDTECH LTD.
PRELIMINARY
1. INTERPRETATION.
1.1. In these Articles, unless the context requires another meaning
the words in the first column of the following table shall
have the meanings set opposite them in the second column:
"ARTICLES" These Articles of Association as from
time to time amended by an Ordinary
Resolution (as defined below);
"AUDITORS" The auditors of the Company;
"THE COMPANY" means the above mentioned company;
"THE COMPANIES LAW"
OR "THE LAW" means the Companies Law - 1999, as
amended from time to time, or any other
law which may come in its stead,
including all amendments made thereto;
"THE U.S. RULES" means the rules of the NASDAQ national
market and the U.S. Securities
Regulations, as amended from time to
time;
"PERSON" includes a company, cooperative society,
or any other body of persons, whether
incorporated or otherwise;
"BOARD OF DIRECTORS" means all the directors of the Company,
including elected directors, the
chairman, holding office pursuant to
these Articles, including alternates,
substitutes or proxies;
"ELECTED DIRECTOR/S" means a member or members of the Board
of Directors elected to hold office as
director/s;
"EXTERNAL DIRECTORS" As defined under the Law and under the
U.S. rules;
<PAGE>
"OFFICE HOLDER" as defined in the Companies Law.
"C.E.O." shall mean: chief executive officer
(mankal).
"CHAIRMAN OF THE
BOARD OF DIRECTORS" as defined in article 90 of this
articles.
"GENERAL MEETINGS" shall mean: all ordinary and
extraordinary meetings of the
shareholders of the Company.
"THE OFFICE" means the registered office of the
Company for the time being;
"THE REGISTER" means the Register of Shareholders
administered in accordance with Section
127 of the Law;
"WRITING" means in handwriting, typewriting,
photography, telex or any other legible
form;
"INCAPACITATED
PERSON" according to the meaning thereof under
the Legal Capacity and Guardianship Law,
5722-1962, as amended, including a minor
who has not yet attained the age of 18
years, a person unsound of mind and a
bankrupt in respect of whom no
rehabilitation has been granted;
"MONTH" OR "YEAR" according to the Gregorian calendar.
"ORDINARY RESOLUTION" a resolution of shareholders of the
Company holding a majority of voting
power represented at a shareholders
meeting in person or by proxy and voting
thereon and/or voting by Ballot
according to Section 87 of the Law;
1.2. Words and expressions defined in the Memorandum of Association
of the Company shall have the meanings in these Articles as
ascribed to them therein.
1.3. Subject to the provisions of this article, in these Articles,
unless the context necessitates another meaning, terms and
expressions which have been defined in the Companies Law shall
have the meanings ascribed to them therein.
1.4. Words in the singular shall also include the plural, and vice
versa. Words in the masculine shall include the feminine and
vice versa, and words which refer to persons shall also
include corporations, and vice versa.
1.5. In these Articles, all the provisions are subject to the
Companies Law and/or to the U.S. rules, insofar as they are
applicable.
2
<PAGE>
1.6. The captions to articles in these Articles are intended for
the convenience of the reader only, and no use shall be made
thereof in the interpretation of these Articles.
LIMITED LIABILITY
2. The Company is a Limited Liability Company and therefore each
shareholder's obligations to the Company's obligations shall be
limited to the payment of the par value of the shares held by such
shareholders, subject to the provisions of the Companies Law.
THE COMPANY'S OBJECTIVES
3. The Company's objectives are to conduct all types of business as are
permitted by law.
THE BUSINESS
4. Any branch or type of business which the Company is authorized to
engage in, either expressly or implied, may be commenced or engaged
in by the Board of Directors at all or any time as it deems fit. The
Board of Directors shall be entitled to cease the conduct of any such
branch or type of business, whether or not the actual conduct thereof
has commenced, for as long as the Board of Directors deems it
conducive not to commence and/or to cease conducting a particular
branch or type of business.
REGISTERED OFFICE
5. The registered office shall be at such place as is decided from time
to time by the Board of Directors.
SHARE CAPITAL
6. The share capital of the Company is NIS 200,000 (Two hundred thousand
NIS) divided into:
3
<PAGE>
(i) 19,949,998 (Nineteen million, nine hundred and forty nine
thousand, nine hundred and ninety eight) Ordinary Shares of a nominal
value of 0.01 (One Agora) each (the "ORDINARY SHARES"); and
(ii) 50,002 (Fifty thousand and two) Deferred Shares of a nominal
value of 0.01 (One Agora) each (the "DEFERRED SHARES").
7. RIGHTS ATTACHING TO THE ORDINARY SHARES.
7.1. At General Meetings of the Company every holder of an
Ordinary Share in respect of which all the calls on such
share have been paid in full, who is personally present or
represented by proxy, shall have one vote in respect of
each Ordinary Share held by him, without reference to the
par value thereof.
7.2. The Ordinary Shares in respect of which all calls have
been fully paid shall confer on their holders the right to
receive notices of, to attend and to vote at General
Meetings of the Company, both ordinary as well as
extraordinary meetings. The Ordinary Shares shall confer
on the holder thereof the right to receive a dividend, to
participate in a distribution of bonus shares and to
participate in the assets of the Company upon its
winding-up, pro rata to the nominal amount paid up on the
shares or credited as paid up in respect thereof, and
without reference to any premium which may have been paid
in respect thereof.
7.3. All the Ordinary Shares shall rank pari passu in all
respects.
8. RIGHTS ATTACHING TO THE DEFERRED SHARES.
The Deferred Shares shall confer on their holders the right to
receive their par value upon liquidation or winding up of the
Company.
9. ALTERATION OF RIGHTS.
9.1. Subject to applicable law, if at any time the share
capital of the Company is divided into different classes
of shares and unless the terms of issue of such class of
shares otherwise stipulate, the rights attaching to any
class of shares (including rights prescribed in the terms
of issue of the shares) may be altered, modified or
canceled, provided the consent in writing thereto is
obtained from the holders of the majority of the issued
shares in that class, or as approved by an Ordinary
Resolution passed at a separate General Meeting of the
shareholders of that class.
9.2. The provisions contained in these Articles with regard to
General Meetings shall apply, mutatis mutandis as the case
may be, to every such General Meeting of the holders of
each class of the Company's shares.
9.3. The special rights conferred on the holders of shares or
any class of shares which have been issued, including also
shares issued with preferential rights or other special
rights, shall not be deemed to have been altered by the
creation or issue of additional shares ranking pari passu
with them, unless otherwise stipulated in the conditions
of issue of such shares.
4
<PAGE>
10. ISSUANCE OF PREFERRED SHARES
Without prejudice to the special rights conferred on the holders of
shares or debentures of the Company, the Company may issue shares
having preferred or deferred rights, or may issue redeemable
preference shares and may redeem same on such conditions and in such
manner as the Company shall decide, subject to the provisions of any
applicable law, from time to time, or may issue shares having special
rights in regard to the distribution of dividends, voting rights,
rights on winding-up or in connection with any other matters, as the
Company may from time to time decide.
11. UNISSUED SHARE CAPITAL
The unissued shares in the capital of the Company shall be under the
control of the Board of Directors, which shall be entitled to allot
or otherwise grant same to such persons under such restrictions and
conditions as it shall deem fit and conducive, whether for
consideration or otherwise, and whether for consideration in cash or
for consideration which is not in cash, above their par value or at a
discount, all on such conditions, in such manner and at such times as
the board of Directors shall deem fit, and subject to the provisions
of the Law. The Board of Directors shall be entitled, inter alia, to
differentiate between shareholders with regard to the amounts of
calls in respect of the allotment of shares (to the extent that there
are calls) and with regard to the time for payment thereof. The Board
of Directors may also issue warrants for the purchase of shares of
the Company and prescribe the manner of the exercise of options,
including the time and price for such exercise and any other
provision which is relevant to the method for distributing the issued
shares of the Company amongst the purchasers thereof.
12. The Board of Directors shall be entitled to prescribe that the
existing shares in the capital of the Company be issued and the times
for the issue and the conditions thereof and any other matter which
may arise in connection with the issue thereof.
13. Subject to the provisions of the Law the Board of Directors may pay
brokerage and/or subscription commissions to any person in respect of
the subscription and/or agreement to subscribe and/or the procuring
of subscriptions and/or a promise to subscribe for shares and/or
debentures and/or other securities of the Company. The Board of
Directors shall further be entitled in ever case of the issue of
securities of the Company to pay brokerage fees, subject to the
provisions of the Law.
14. In every case of a rights offer to the shareholders, the Board of
Directors shall be entitled to decide whether the shares offered
shall be of a uniform class for all the shareholders, or that an
offer shall be made to each holder of shares of the same class in
respect of which he is entitled to participate in the rights offer.
15. In every case of a rights offer the Board of Directors shall be
entitled, in its discretion, to resolve any problems and difficulties
likely to arise in regard to fractions of rights, and without
prejudice to the generality of the foregoing, the Board of Directors
shall be entitled to specify that no shares shall be allotted in
respect of fractions of rights, or that fractions of rights shall be
sold and the (net) proceeds shall be paid to the persons entitled to
the fractions of rights, or, in accordance with a decision by the
Board of Directors, to the benefit of the Company.
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INCREASE OF AND ALTERATIONS TO CAPITAL
16. The Company may, from time to time, by an Ordinary Resolution,
increase its share capital by way of the creation of new shares,
whether or not all the existing shares have been issued up to the
date of the resolution, whether or not it has been decided to issue
same, and whether or not calls have been made on all the issued
shares.
17. The increase of capital shall be in such amount and divided into
shares of such nominal value, and with such restrictions and
conditions and with such rights and privileges as the Ordinary
Resolution dealing with the creation of the shares prescribes,
subject to the special rights of an existing class of shares, and if
no provisions are contained in the Ordinary Resolution, then as the
Board of Directors shall prescribe.
18. Subject to the provisions of these Articles and applicable law, the
Company may create shares having preferred rights or restricted
rights in regard to dividends or participation in assets on
winding-up, or with a special right for voting, or without voting
rights.
19. Unless otherwise stated in the Ordinary Resolution approving the
increase of the share capital, the new shares shall be subject to
those provisions in regard to issue, allotment, alteration of rights,
payment of calls, liens, forfeiture, transfer, transmission and other
provisions which apply to the shares of the Company.
20. By Ordinary Resolution, the Company may:
20.1. consolidate and sub-divide its existing share capital, or
any part thereof, into shares of a larger denomination
than the existing shares:
20.2. sub-divide, by way of a redistribution of the existing
shares, in whole or in part, its share capital, in whole
or in part, into shares of a smaller denomination than
nominal value of the existing shares and without prejudice
to the foregoing, one or more of the shares so created may
be granted any preferred or deferred right or any special
right with regard to dividend, participation in assets on
winding-up, voting and so forth, subject always to the
provisions of the Law and these Articles;
20.3. reduce its share capital in such manner and subject to the
such restrictions as the Law prescribes;
20.4. Cancel any shares which on the date of passing of the
resolution have not been issued and to reduce its share
capital by the amount of the shares so canceled.
21. In the event that the Company shall adopt any of the resolutions
described in Article 20 above, the Board of Directors shall be
entitled to prescribe arrangements necessary in order to resolve any
difficulty likely to arise in connection with such resolutions,
including in the event of a consolidation in which it shall be
entitled to prescribe which shares shall be consolidated into a
particular class of share, and in the case of the consolidation of
shares which are not owned by the same owner, it shall be entitled to
specify arrangements for the sale of the consolidated share, the
manner of selling it and the manner of distributing the (net)
proceeds and may appoint a person to execute the transfer and any act
done by such person shall be valid and no allegations against him
shall be entertained.
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SHARE CERTIFICATES
22. Share certificates evidencing title to the shares of the Company
shall be issued under the seal or rubber stamp of the Company, and
together with the signatures of two members of the Board of
Directors, or one director together with the secretary of the
Company. The Board of Directors shall be entitled to decide that the
signatures be effected in any mechanical form, provided that the
signature shall be effected under the supervision of the Board of
Directors in such manner as it prescribes.
23. Every member shall be entitled, free of charge, to one certificate in
respect of all the shares of a single class registered in his name.
24. The Board of Directors shall not refuse a request by a member to
obtain several certificates in place of one certificate, unless such
request is, in the opinion of the Board of Directors, unreasonable.
Where a member has sold or transferred some of his shares, he shall
be entitled, free of charge, to receive a certificate in respect of
his remaining shares, provided that the previous certificate is
delivered to the Company before the issuance of a new certificate.
25. Every share certificate shall specify the number of the shares in
respect of which the certificate is issued and also the amounts which
have been paid up in respect of each share.
26. No person shall be recognized by the Company as having any right to a
share unless he is the registered owner of the shares in the
Register. The Company shall not be bound by and shall not recognize
any right or privilege pursuant to the laws of equity, or a fiduciary
relationship or a chose in action, future or partial, in any share,
or a right or privilege to a fraction of a share, or (unless these
Articles otherwise direct) any other right in respect of a share,
except the absolute right to the share as a whole, where same is
vested in the owner registered in the Register.
27. A share certificate registered in the names of two or more persons
shall be delivered to one of the joint holders, and the Company shall
not be obliged to issue more than one certificate to all the joint
holders of shares and the delivery of such certificate to one of the
joint holders shall be deemed to be delivery to all of them.
28. If a share certificate, whether a registered share or bearer share,
should be lost, destroyed or defaced, or should any coupon to a
bearer share certificate be lost, destroyed or defaced, the Board of
Directors shall be entitled to issue a new certificate or coupon in
its place, provided that the certificate or coupon is delivered to it
and destroyed by it, or it is proved to the satisfaction of the Board
of Directors that the certificate or coupon was lost or destroyed and
security has been received to its satisfaction in respect of any
possible damages and after payment of such amount as the Board of
Directors shall prescribe.
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CALLS ON SHARES
29. The Board of Directors may from time to time, in its discretion, make
calls on members in respect of amounts which are still unpaid in
respect of the shares held by each of the members (including
premiums), and the terms of issue which do not prescribe that same be
paid at fixed times, and every member shall be obliged to pay the
amount of the call made on him, at such time and at such place as
stipulated by the Board of Directors.
30. In respect of every call prior notice of at least 14 business days
shall be given, stating to whom the amount called is to be paid, the
time for payment and the place thereof, provided that prior to the
due date for payment of such call, the Board of Directors may, by
written notice to the members, cancel the call or extend the date of
payment thereof. A call shall be deemed to have been made on the date
on which the directors decide on the call.
31. If according to the terms of issue of any share, or otherwise, any
amount is required to be paid at a fixed time or in installments at
fixed times, whether the payment is made on account of the share
capital in respect of the share or in the form of a premium, every
such payment or every such installment shall be paid as if it was a
call duly made by the Board of Directors, in respect of which notice
was duly given, and all the provisions contained in these Articles in
regard to calls shall apply to such amount or to such installment.
32. Joint holders of a share shall be jointly and severally liable for
the payment of all installments and calls due in respect of such
share.
33. In the event that a call or installment due on account of a share is
not paid on or before the date fixed for payment thereof, the holder
of the share, or the person to whom the share has been allotted,
shall be obliged to pay linkage differentials and interest on the
amount of the call or the installment, at such rate as shall be
determined by the Board of Directors, commencing from the date fixed
for the payment thereof and until the date of actual payment. The
Board of Directors may, however, waive the payment of the linkage
differentials or the interest or part thereof.
34. A member shall not be entitled to receive a dividend and shall not be
entitled to exercise any right as a member, including but not limited
to, the right to receive notices of General Meetings of any type of
the Company and the right to attend and vote thereat and to transfer
the shares to another, unless he has paid all the calls payable from
time to time and which apply to any of his shares, whether he holds
same alone or jointly with another, plus linkage differentials,
interest and expenses, if any.
35. The Board of Directors may, if it deems fit, accept payment from a
member wishing to anticipate the payment of all moneys which remain
unpaid on account of his shares, or part thereof which are over and
above the amounts which have actually been called, and the Board of
Directors shall be entitled to pay such member linkage differentials
and interest in respect of the amounts paid in advance, or that
portion thereof which exceeds the amount called for the time being on
account of the shares in respect of which the advance payment is
made, at such rate as is agreed upon between the board of Directors
and the member, with this being in addition to dividends payable (if
any) on the paid-up portion of the share in respect of which the
advance payment is made.
The Board of Directors may, at any time, repay the amount paid in
advance as aforesaid, in whole or in part, in its sole discretion.
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FORFEITURE AND LIEN
36. If a member fails to make payment of any call or other installment on
or before the date fixed for the payment thereof, the Board of
Directors may, at any time thereafter and for as long as the part of
the call or installment remains unpaid, serve on him a notice
demanding that he make payment thereof, together with the linkage
differentials and interest at such rate as is specified by the Board
of Directors and all the expenses incurred by the Company in
consequence of such non-payment.
37. The notice shall specify a further date, which shall be at least 14
business days after the date of the notice, and a place or places at
which such call or installment is to be paid, together with linkage
differentials and interest and expenses as aforesaid.
The notice shall further state that, if the amount is not paid on or
before the date specified, and at the place mentioned in such notice,
the shares in respect of which the call was made, or the installment
is due, shall be liable to forfeiture.
38. If the demands contained in such notice are not complied with the
Board of Directors may treat the shares in respect of which the
notice referred to in Articles 36 and 37 was given as forfeited. Such
forfeiture shall include all the dividends bonus shares and other
benefits which have been declared in respect of the forfeited shares
which have not actually been paid prior to the forfeiture.
39. Any share so forfeited or waived shall be deemed to be the property
of the Company and the Board of Directors shall be entitled subject
to the provisions of these Articles and the Law, to sell, re-allot or
otherwise dispose thereof, as it deems fit, whether the amount paid
previously in respect of that share is credited, in whole or in part.
The Board of Directors shall be entitled to collect the moneys which
have been forfeited, or part thereof, as it shall deem fit, but it
shall not be obliged to do so.
40. The Board of Directors may, at any time before any share forfeited as
aforesaid is sold or re-allotted or otherwise dispose of, cancel the
forfeiture on such conditions as it deems fit.
41. Any person whose shares have been forfeited shall cease to be a
member in respect of the forfeited shares, but shall, nonetheless
remain liable for the payment to the Company of all calls,
installments, linkage differentials, interest and expenses due on
account of or in respect of such shares on the date of forfeiture, in
respect of the forfeited shares, together with interest on such
amounts reckoned from the date of forfeiture until the date of
payment, at such rate as the Board of Directors shall form time to
time specify. However, his liability shall cease after the Company
has received all the amounts called in respect of the shares.
42. The provisions of these Articles in regard to forfeiture shall also
apply to cases of non-payment of any amount, which, according to the
terms of issue of the share, or which under the conditions of
allotment the due date for payment of which fell on a fixed date,
whether this be on account of the par value of the share or in the
form of a premium, as if such amount was payable pursuant to a call
duly made and notified.
43. The Company shall have a first and paramount lien over all the shares
which have not been fully paid up and which are registered in the
name of any member (whether individually or jointly with others) and
also over the proceeds of the sale thereof, as security for the debts
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and obligations of such member to the Company and his contractual
engagements with it, either individually or together with others.
This right of lien shall apply whether or not the due date for
payment of such debts or the fulfillment or performance of such
obligations has arrived, and no rights in equity shall be created in
respect of any share, over which there is a lien as aforesaid. The
aforesaid lien shall apply to all dividends or benefits which may be
declared, from time to time, on such shares, unless the Board of
Directors shall decide otherwise. Registration by the Company of a
transfer of shares shall be deemed to be a waiver by the Company of
the lien (if any) on the shares.
44. In order to realize such lien, the Board of Directors may sell the
shares under lien at such time and in such manner as, it shall deem
fit, but no share may be sold unless the period referred to below has
elapsed and written notice has been given to the member, his trustee,
liquidator, receiver, the executors of his estate, or anyone who
acquires a right to shares in consequences of the bankruptcy of a
member, as the case may be, stating that the Company intends to sell
the shares, if he or they should fail to pay the aforesaid debts, or
fail to discharge or fulfill the aforesaid obligations within seven
days form the date of the notice.
45. The net proceeds of any such sale of shares, after deduction of the
expenses attendant on the sale, shall serve for the discharge of the
debts of such member or for performance of such member's obligations
(including debts, undertaking and contractual engagements due date
for the payment or performance of which has arrived) and the surplus,
if any, shall be paid to the member, his trustee, liquidator,
receiver, guardians, the executors of his estate, or to his
successors-in-title.
46. In every case of a sale following forfeiture or waiver, or for
purposes of executing a lien by exercising all the powers conferred
above, the Board of Directors shall be entitled to appoint a person
to sign an instrument of transfer of the shares sold, and to arrange
for the registration of the name of the buyer in the Register in
respect of the shares sold.
47. An affidavit signed by the Board of Directors that a particular share
of the Company was forfeited, waived or sold by the Company by virtue
of a lien, shall serve as conclusive evidence of the facts contained
therein as against any person claiming a right in the share. The
purchaser of a share who relies on such affidavit shall not be
obliged to investigate whether the sale, re-allotment or transfer, or
the amount of consideration and the manner of application of the
proceeds of the sale, were lawfully effected, and after his name has
been registered in the Register he shall have a full right of title
to the share and such right shall not be adversely affected by a
defect or invalidity which occurred in the forfeiture, waiver, sale,
re-allotment or transfer of the share.
TRANSFER AND TRANSMISSION OF SHARES
48. No transfer of shares shall be registered unless a proper instrument
of transfer is delivered to the Company or to such other place
specified for this purpose by the Board of Directors. Subject to the
provisions of these Articles an instrument of transfer of a share in
the Company shall be signed by the transferor and the transferee.
The transferor shall be deemed to remain the holder of the share up
until the time the name of the transferee is registered in the
Register in respect of the share transferred.
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49. Insofar as the circumstances permit, the instrument of transfer of a
share shall be drawn up in the form set out below, or in any other
form the Board of Directors may approve (hereinafter: the "DEED OF
Transfer").
I _______________, I.D. _______________ of _______________
(hereinafter: the "TRANSFEROR"), in consideration for an amount of
NIS _______________ (in words) paid to me by _______________ I.D.
_______________ of _______________ (hereinafter: the "TRANSFEREE"),
hereby transfer to the transferee _______________ shares of NIS
_______________ each, marked with the numbers _______________ to
_______________ (inclusive) of a company known as Fundtech Ltd., to
be held by the transferee, the acquires of his rights and his
successors-in title, under all the same conditions under which I held
same prior to the signing of this instrument, and I, the transferee,
hereby agree to accept the aforementioned share in accordance with
the above mentioned conditions.
In witness whereof we have hereunto signed this _____ day of _______
20__.
Transferor _______________ Transferee _______________
Witnesses to Signature _______________
50. The Company may close the transfer registers and the Register for
such period of time as the Board of Directors shall deem fit,
provided that such period of time shall not in total exceed thirty
days each year.
51. Every instrument of transfer shall be submitted to the Office or to
such other place as the Board of Directors shall prescribe, for
purposes of registration, together with the share certificates about
to be transferred, or if no such certificate was issued, together
with the letter of allotment of the shares about to be transferred
(if such letter was issued), and such other proof as the Board of
Directors may demand in regard to the transferor's right of title or
his right to transfer the shares.
The Board of Directors shall have the right to refuse to recognize an
assignment of shares until the appropriate securities under the
circumstances have been provided, as shall be determined by the Board
of Directors in a specific case or from time to time in general.
Instruments of transfer which are registered shall remain within the
Company.
52. Every instrument of transfer shall relate to one class of shares
only, unless the Board of Directors shall otherwise agree.
53. The executors of the will or administrator of a deceased
shareholder's estate (such shareholder not being one of a joint
owners of a share) or, in the absence of an administrator of the
estate or executor of the will, persons having a right as heirs of
the deceased shareholder, shall be entitled to demand that the
Company recognize them as owners of rights in the share. The
provisions of Article 51 above shall apply, mutatis mutandis, also in
regard to this article.
54. In the case of a share registered in the names of two or more
persons, the Company shall recognize only the surviving owners as
persons having rights in the share. However, the aforementioned shall
not be construed as releasing the estate of a deceased joint
shareholder from any and all undertakings in respect of the shares.
Any person who shall become an owner of shares following the death of
a member shall be entitled to be registered as owner of such shares
after having presented to the Company Secretary an inheritance order
or probation order or order of appointment of an administrator of
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estate and any other proof as required - if these are sufficient in
the opinion of the Company Secretary - testifying to such person's
right to appear as shareholder in accordance with these Articles, and
which shall testify to his title to such shares. The provisions of
Article 51 above shall apply, mutatis mutandis, also in regard to
this article.
55. The receiver or liquidator of a member who is a company or the
trustee in bankruptcy or the official receiver of a member who is
bankrupt, upon presenting appropriate proof to the satisfaction of
the Company Secretary, that he has the right to appear in this
capacity and which testifies to his title, may, with the consent of
the Board of Directors (the Board of Directors shall not be obligated
to give such consent) be registered as the owner of such shares.
Furthermore, he may assign such shares in accordance with the rules
prescribed in these Articles. The provisions of Article 52 above
shall apply, mutatis mutandis, also in regard to this article.
56. A person entitled to be registered as a shareholder following
assignment pursuant to this article shall be entitled, if approved by
the Board of Directors and to the extent and under the conditions
prescribed by the Board of Directors, to dividends and any other
monies paid in respect of the shares, and shall be entitled to give
the Company confirmation of the payments; however, he shall not be
entitled to receive notices of General meetings, to be present or to
vote therein or, subject to the provisions of these Articles, to make
use of any rights of members, until he has been registered as owner
of such shares in the Register.
BEARER SHARE CERTIFICATES
57. The Company may issue bearer shares, or exchanges a share certificate
for a bearer share certificate, and accordingly the Board of
directors may, in its discretion, with respect to any share which is
fully paid, on application in writing signed by the person registered
as holder of the share, and authenticated by such evidence as the
Board of Directors, may require for proving the identity of the
person signing the request, and on receiving the certificate, of the
share, and the stamp duty (if any) on the bearer shares and such fee
as the Board of Directors may from time to time specify, issue a
bearer share, stamped with the seal of the Company and duly stamped,
stating that the bearer is the owner of the shares of dividends, or
other moneys, on the shares included in the certificate.
58. A bearer share certificate shall entitle the bearer to the shares
included in it and such shares shall be transferable by the delivery
of the bearer share, and the provisions of the Articles of the
Company with respect to transfer and transmission of shares shall not
apply to the shares included in the certificate.
59. The bearer of a bearer share shall, on surrender of the bearer share
certificate to the Company for cancellation and on payment of such
sum as the board of Directors may from time to time prescribe, be
entitled to have his name entered as a member in the register of
members in respect of the shares included in the certificate.
60. The bearer of a bearer share may at any time deposit the certificate
at the office of the Company, or such other place as the Board of
Directors may prescribe, and so long as the certificate remains so
deposited the depositor shall have the same right to sign a
requisition for calling a General Meeting of the Company, and of
amending and voting and exercising the other privileges of a member
at any General Meeting of the Company, held after expiration of two
days from the time of the deposit, as if his name were registered in
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the registrar as the registered holder of the shares included in the
deposited certificate. Not more than one person shall be recognized
as depositor of a particular bearer share. The Company shall, on two
days' written notice return the deposited bearer share to the
depositor.
Unless otherwise expressly provided in these Articles, no person
shall, as bearer of a bearer share, sign a requisition for calling a
meeting of the Company, or attend, or vote, or exercise any other
rights of a member at General Meetings of the Company, but the bearer
of a bearer share shall be entitled in all other respects to the same
privileges and advantages as if he were named in the Register as the
holder of the shares included in the bearer share certificate, and he
shall be a member of the Company.
GENERAL MEETING
61. A General Meeting shall be held at least once in every year, not
later than 15 months after the last General Meeting, at such time and
at such place as the Board of Directors shall determine. Such General
Meeting shall be called annual ordinary meetings, and all other
meetings of the Company shall be called extraordinary meetings.
62. The Board of Directors may call an extraordinary meeting whenever it
sees fit to do so.
63. The Board of Directors shall be obliged to call an extraordinary
meeting upon a requisition in writing in accordance with Section 63
of the Law.
64.
64.1. No notice according to Section 69(b) of the Law shall be
issued by the Company with respect to any shareholders
meeting.
64.2. Notwithstanding the provisions of article 64.1 above,
prior notice of 14 days shall be given in regard to the
holding of an annual ordinary meeting or an extraordinary
meeting and, if the agenda of such a meeting includes
issues which can be voted on by ballot according to
Section 87 of the Law - then prior notice of 21 days shall
be given. In counting the days, the day of publication
shall not be counted, but the day of the meeting shall be
counted.
64.3. The notice shall specify (i) the type of meeting, (ii) the
place, the day and the hour of the meeting, (iii) the
issues on the agenda, (iv) a brief summary of the proposed
resolutions, (v) the majority required for the acceptance
of each resolution, (vi) the time on which the right of a
shareholder to vote shall be established according to
Section 182 of the Law (vii) arrangements on vote by
ballot under the provisions of Sections 87-89 of the Law,
(vii) in the event that the Company has established that
an adjourned meeting shall be held on such date which is
later than the date provided for in Section 78(b) of the
Law, such later date shall be included in the notice, and
(viii) the telephone number and address of the Company's
office and the time on which a shareholder can review the
full text of the proposed resolutions. The Company may add
additional places for such review including an internet
site in which such shareholder can find, among other
things, drafts of the ballot and Position Papers (as
defined in Section 88 of the Law).. The notice shall be
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given in the manner prescribed below under the heading
"Notices" in Articles 139 to 142 below.
64.4. The company is obligated to give notice of General Meeting
to the following only:
64.4.1. To all shareholders of the Company, except for
members whose address in Israel or abroad in
unknown, or who have not provided the Company
with an address in Israel or abroad for the
service of such notice.
64.4.2. In regard to a share registered jointly in the
names of more than one person - as provided in
Article 141 below.
65. The inadvertent omission in good faith to serve notice on a member
entitled to receive such notice, or the non-receipt of the notice,
shall not invalidate a resolution passed at such meeting.
PROCEEDINGS AT GENERAL MEETING
66. No business shall be conducted at a General Meeting unless a quorum
is present, and no resolution shall be passed unless a quorum is
present at the time the resolution is voted in. Except in cases where
it is otherwise stipulated, a quorum shall be constituted when there
are personally present, or represented by proxy, at least two members
who jointly hold at least 331/3% of the voting rights in the Company.
A proxy shall be deemed to be two or more members, according to the
number of members he represents.
67. If within half an hour from the time appointed for the meeting, a
quorum is not present, without there being an obligation to notify
the members to that effect, the meeting shall be adjourned to the
same day, in the following week, at the same hour and at the same
place. Unless such day shall fall on a statutory holiday (either in
Israel or in the U.S.A.), in which case the meeting will be adjourned
to the first business day which follows such statutory holiday.
If at the adjourned meeting there is no quorum, then two members,
personally present, or represented by proxy, shall constitute a
quorum and shall be entitled to consider and decide on the matters
for which the meeting was called.
68. The chairman of the Board of Directors, or any other person appointed
for this purpose by the Board of Directors, shall preside at every
General Meeting of the meeting within 15 minutes from the time
appointed for the meeting, the members present at the meeting shall
elect one of their number to serve as chairman of the meeting.
69. Resolutions at the General Meeting shall be passed by a vote. Every
vote at a General Meeting shall be conducted according to the number
of votes to which each member is entitled on the basis of the number
of shares held by him which confer on him a right to vote at General
Meeting.
70. Where a poll has been demanded, the chairman of the meeting shall be
entitled - but not obliged - to accede to the demand. Where the
chairman of the meeting has decided to hold a poll, such poll shall
be held in such manner, at such time and at such place as the
chairman of the meeting directs, either immediately or after an
interval or postponement, or in any other way, and the results of the
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vote shall be deemed to be the resolution at the meeting at which the
poll was demanded. A person demanding a poll may withdraw his demand
prior to the poll being held.
71. A demand for the holding of a poll shall not prevent the continued
business of the meeting on all other questions apart of the question
in respect of which a poll was demanded.
72. The announcement by the chairman that a resolution has been passed
unanimously or by a particular majority, or has been rejected, and a
note recorded to that effect in the Company's minute book, shall
serve as conclusive proof of such fact, and there shall be no
necessity for proving the number of votes or the proportion of votes
given for or against the resolution.
73. The chairman of a General Meeting may adjourn the meeting from time
to time and from place to place if approved by a majority vote, and
he shall be obliged to do so if the meeting, by a majority vote, so
demands, but at an adjourned meeting no other matters be considered
or decided apart from the matters which were on the agenda of the
meeting at which it was decided on the adjournment and in respect of
which no resolution was taken. There shall be no necessity to give
notice in regard to the adjournment or in regard to the matters on
the agenda of the adjourned meeting, unless the adjourned meeting is
to be held more than 30 days after the date of the original meeting.
VOTES OF MEMBERS
74. Every member entitled to vote at a General Meeting, who is personally
present or represented by proxy, shall have one vote in respect of
each ordinary share held by him, without reference to the par value
thereof.
75. In the case of joint shareholders, the vote of the senior joint
holder, given personally or by proxy, shall be accepted, to the
exclusion of the vote of the remaining joint shareholders, and for
these purposes the question as to who is the senior of the joint
shareholders shall be the person amongst the joint holders whose name
appears first in the Register.
76. A member who is legally incapacitated shall vote solely through his
guardian or other person who fulfills the function of such guardian
and who was appointed by a court, and any guardian or other person as
aforesaid shall be entitled to vote by way of a proxy, or in such
manner as the court directs.
77. Any corporation which is a member of the Company shall be entitled,
by way of resolution of its directors or another body which manages,
to appoint such person which it deems fit, whether or not he is a
member of the Company, to act as its representative at any General
Meeting of the Company or at a meeting of a class of shares in the
Company which such corporation is entitled to attend and to vote
thereat, and the appointed as aforesaid shall be entitled, on behalf
of the corporation whom he represents, to exercise all the same
powers and authorities which the corporation itself could have
exercised had it been a natural person shareholder of the Company.
78. Every member of the Company who is entitled to receive notices of
General Meetings of the Company, and to attend and vote thereat,
shall be entitled to appoint a proxy. A proxy can be appointed by
more than one member, and he can vote in different ways on behalf of
each principal.
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The instrument appointing a proxy shall be in writing signed by the
person making the appointment or by his authorized representative,
and if the person making the appointment is a corporation, the power
of attorney shall be signed in the manner in which the corporation
signs on documents which bind it, and a certificate of an attorney
with regard to the authority of the signatories to bind the
corporation shall be attached thereto. The proxy need not be a member
of the Company.
79. The instrument appointing a proxy, or a copy thereof certified by an
attorney, shall be lodged at the Office, or at such other place as
the Board of Directors shall specify, not less than 24 hours prior to
the meeting at which the proxy intends to vote on the strength of
such instrument of proxy. A document appointing a proxy shall be
valid for every adjourned meeting of the meeting to which the
document relates.
80. Every instrument appointing a proxy, whether for a meeting
specifically indicated, or otherwise, shall, as far as circumstances
permit, be in the following form, or in any other form approved by
the Board of Directors:
I ______________ of ______________ being a member holding voting
shares in Fundtech Ltd., hereby appoint Mr. ______________ of
______________ or failing him, Mr. ______________ or ______________,
or failing him, Mr. ______________ of ______________, to vote in my
name, place and stead at the (ordinary/extraordinary) Meeting of the
Company to be held on the ____ of ______ 19__, and at any adjourned
meeting thereof.
In witness whereof I have hereto set my hand on the _____ day of
_____
81. No member shall be entitled to vote at a General Meeting unless he
has paid all the calls and all the amounts due from him, for the time
being, in respect of his shares.
82. A vote given in accordance with the instructions contained in an
instrument appointing a proxy shall be valid notwithstanding the
death of the appointer, or the revocation of the proxy, or the
transfer of the share in respect of which the vote was given as
aforesaid, unless notice in writing of the death, revocation or
transfer is received at the office of the Company, or by the chairman
of the meeting, prior to such vote.
83. Subject to the provisions of the Ordinance, a resolution in writing
signed by the holders of 75% of the shares in the Company entitled to
vote in respect thereof at General Meetings of the Company shall be
valid and effectual and shall have the same force and effect for all
purposes as a resolution lawfully passed at a General Meeting of the
Company duly convened and held for purposes of passing such
resolution, provided that the Company gave notice in regard to the
suggested resolution, the manner stipulated in Articles 150 - 153, to
the holders of all the shares in the Company entitled to vote in
respect thereof at General Meetings, and provided further that no
holder/s of more than 10% of the shares in the company did not
request the convening of a General Meeting within 7 days.
THE BOARD OF DIRECTORS
84.
84.1. Unless otherwise resolved by an Ordinary Resolution of the
General Meeting of the Company, the number of directors of
the Company shall be between 5 and 7. At any time the
minimum number of directors shall be not less than 4. Any
director shall be eligible for re-election upon
termination of his term of office.
84.2. No corporation may serve as a director of the Company
unless it has appointed an individual who is not
disqualified from holding office on its behalf to the
Board of Directors. An individual holding office on its
behalf of a corporation as aforesaid shall be governed by
the same duties and obligations which apply to an officer,
without this derogating from the liability of the
corporation on whose behalf such individual was appointed
for such obligations.
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85.
85.1. Prior to every annual ordinary meeting of the Company, the
Board of Directors of the Company shall resolve by a
majority vote the names of between 5 to 7 persons to be
proposed to the shareholders of the Company for election
as directors of the Company until the next annual ordinary
Meeting (hereinafter: the "PANEL"). Except for the Panel,
no candidate for the office of a director may be proposed
at an annual ordinary Meeting of the Company unless not
less than 72 hours and not more than 42 days prior to the
date appointed for the annual ordinary meeting, a notice
in writing, signed by members holding at least 10% of the
Company's issued and outstanding shares who are entitled
to attend a meeting in respect of which notice has been
sent and who are entitled to vote thereat, is delivered to
the office of the Company stating that such members intend
to propose 5 to 7 candidates for the office of directors
instead of the Panel proposed by the Board of Directors
(hereinafter: "ALTERNATE PANEL(S)").
85.2. The Panel or Alternate Panel(s) shall be elected by an
Ordinary Resolution at every annual general meeting, for a
term of office which shall end upon the convening of the
first annual general meeting held after the date of their
election.
85.3. Every director shall hold office until the end of the next
annual ordinary meeting following the meeting at which he
was elected, unless his office is vacated in accordance
with Article 87 below or Article 91. If at the annual
ordinary meeting no Panel or Alternate Panel are elected,
the previous directors shall continue to hold office until
the convening of a General Meeting at which a Panel or
Alternate Panel shall be elected.
85.4. If the office of a members/s of the Board of Directors
shall be vacated, the remaining members of the Board of
Directors shall be entitled to appoint an additional
directors in place of the director/s whose office has been
vacated, for a term of office according to the remaining
period of the term of office of the director/s whose
office has been vacated.
86. The directors in their capacity as such shall be entitled to receive
remuneration and expenses incurred within the scope of fulfilling
their functions as directors. The remuneration of the directors shall
be fixed in accordance with the provisions of the Law. The External
Directors shall receive their remuneration in accordance with the
U.S. rules and the Law.
The conditions of the terms of office of members of the Board of
Directors shall be decided by the Board of Directors, but same shall
be valid only if ratified in the manner required under the Law. The
remuneration of directors may be fixed as an overall payment and/or
as a payment in respect of attendance at meetings. In addition to his
remuneration, each director shall be entitled to receive a refund in
respect of his reasonable expenses connected with performing his
functions and services as a director.
87.
87.1. Subject to the provisions of the Law and the U.S. rules
with regard to external directors, and subject to Article
91 below, the office of a member of the Board of Directors
shall be vacated in any one of the following events:
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87.1.1. If he resigns his office by way of a letter
signed by him, lodged at the Office of the
Company.
87.1.2. If he is declared bankrupt.
87.1.3. If he becomes insane or unsound of mind.
87.1.4. On his death, and in the case of a corporation
- upon its winding-up.
87.2. If the office of a member of the Board of Directors should
be vacated, the remaining members of the Board of
Directors shall be entitled to act for all purposes, for
as long as their number does not fall below the minimum,
for the time being, specified for the directors, as
prescribed in Article 84 above. Should their number drop
below the aforesaid minimum, the directors shall not be
entitled to act, except for the appointment of additional
directors, or for the purpose of calling a general meeting
for the appointment of additional directors, or for the
purpose of calling a general meeting for the appointment
of a new Board of Directors. Should the number of
directors fall below the aforesaid minimum and no action
is undertaken by the Board of Directors within 10 days,
then within 2 days thereafter the C.E.O. of the Company,
must call a General Meeting for the purpose of appointing
a new Board of Directors. In the event that the C.E.O. of
the Company does not call a General Meeting within 2 days,
then the Chairman of the Board of Directors must within 2
days thereafter call a General Meeting for the Purpose of
appointing a new Board of Directors.
ALTERNATE DIRECTORS
88.
88.1. Subject to the provisions of the Companies Law, a Director
may, by written notice to the Company, appoint an
alternate for himself (in these Articles referred to as
"ALTERNATE DIRECTOR"), remove such Alternate Director and
appoint another Alternate Director in place of any
Alternate Director appointed by him whose office has been
vacated for any reason whatsoever. Unless the appointing
Director, by the instrument appointing an Alternate
Director or by written notice to the Company, limits such
appointment to a specified period of time or restricts it
to a specified meeting or action of the Board of
Directors, or otherwise restricts its scope, the
appointment shall be for an indefinite period, and for all
purposes.
88.2. Any notice given to the Company pursuant to Article 88.1
shall become effective on the date fixed therein, or upon
the delivery thereof to the Company, whichever is later.
88.3. An Alternate Director shall have all the rights and
obligations of the Director who appointed him, provided,
however, that he may not in turn appoint an alternate for
himself (unless the instrument appointing him otherwise
expressly provides), and provided further that an
Alternate Director shall have no standing at any meeting
of the Board of Directors or any committee thereof while
the Director who appointed him is present.
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88.4. Any natural person, who is not a member of the Board of
Directors or an Alternate Director at that time, may act
as an Alternate Director for a director. One person may
not act as Alternate Director for several directors.
88.5. The office of an Alternate Director shall be vacated under
the circumstances, mutatis mutandis, set forth in Article
44, and such office shall ipso facto be vacated if the
Director who appointed such Alternate Director ceases to
be a Director.
89.
89.1. Subject to the provisions of any law which may not be
stipulated upon, a director shall not be disqualified by
virtue of his office from holding another office in the
Company or in any other company in which the Company is a
shareholder or in which it has any other form of interest,
or of entering into a contract with the Company, either as
seller or buyer or otherwise. Likewise, no contract made
by the Company or on its behalf in which a director has
any form of interest may be attacked and a director shall
not be obliged to account to the Company for any profit
deriving from such office, or resulting from such
contract, merely by virtue of the fact that he serves as a
director or by reason of the fiduciary relationship
thereby created, but such director shall be obliged to
disclose to the Board of Directors the nature of any such
interest at the first opportunity.
A general notice to the effect that a director is a member
of a particular firm or a particular company and that he
must be deemed to have an interest in any business with
such firm or company shall be deemed to be adequate
disclosure for purposes of this article in relation to
such director, and after such general notice has been
given, such director shall not be obliged to give special
notice in relation to any particular business with such
firm or such company.
89.2. Subject to the provisions of the Law and these Articles,
the Company shall be entitled to enter into a transaction
in which an Office Holder therein, as this term is defined
in the Law has a personal interest, directly or
indirectly, and may enter into any contract or otherwise
transact any business with any third party in which
contract or business an Office Holder has a personal
interest, directly or indirectly.
90. The Board of Directors shall elect one or more of its members to
serve as the chairman of the Board of Directors, provided that,
subject to the provisions of Section 121(c) of the Law, the CEO of
the Company shall not serve as Chairman of the Board of Directors.
The office of chairman of the Board of Directors shall be vacated in
each of the cases mentioned in Articles 87.1 above and 91 below.
91. The Company may, in a General Meeting for which a 21 days prior
notice was given, by Ordinary Resolution, dismiss any of the Elected
Directors within the meaning thereof under Article 2 of these
Articles, prior to the end of his term of office, and it shall be
entitled, by Ordinary Resolution, to appoint another person in his
place as a director of the Company. The person so appointed shall
hold such office only for that period of time during which the
director whom he replaces would have held office.
92. A director shall not be obliged to hold any share in the Company.
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C.E.O.
93.
93.1. The Board of Directors shall, from time to time, appoint a
C.E.O and subject to the provisions of the Law delineate
his powers and authorities and his remuneration. Subject
to any contract between the CEO and the Company, the
directors may dismiss him or replace him at any time they
deem fit.
93.2. A C.E.O need not be a director or member of the Company.
Subject to the provisions of any contract between him and
the Company, all the same provisions with regard to
appointment, resignation and removal from office shall
apply to the C.E.O if he is also a director, as apply to
the Elected Directors. In addition to the matters set
forth in Article 87, where a C.E.O who serves as a
director has ceased to hold one of these offices for any
reason whatsoever, except if he has ceased to hold office
of his own initiative, his appointment to the other office
shall forthwith expire.
93.3. The directors shall be entitled from time to time delegate
to the C.E.O for the time being such of the powers they
have pursuant to these Articles as they deem appropriate,
and they shall be entitled to grant such powers for such
period and for such purposes and on such conditions and
with such restrictions as they deem expedient, and they
shall be entitled to grant such powers without renouncing
the powers and authorities of the directors in such
regard, and they may, from time to time, revoke, annul and
alter such powers and authorities, in whole or in part.
93.4. Subject to the provisions of the Law, the remuneration of
a C.E.O shall be fixed from time to time by the Board of
Directors and it may be in the form of a fixed salary or
commissions or a participation in profits, or in any other
manner which may be decided by the Board of Directors.
PROCEEDING OF THE BOARD OF DIRECTORS
94.
94.1. The Board of Directors may meet in order to administer the
business and may, subject to the provisions of the Law,
adjourn its meetings and regulate its proceedings and
operations as it deems fit It may also prescribe the
quorum required for the conduct of business. Until
otherwise decided a quorum shall be constituted if a
majority of the directors holding office for the time
being are present.
94.2. Should a director or directors be barred from being
present and voting at a meeting of the Board of Directors
by virtue of the contents of Section 278 of the Law, the
quorum shall be a majority of the directors entitled to be
present and to vote at the meeting of the Board of
Directors.
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95. Any director, the C.E.O or the auditor of the Company in the event
stipulated in Section 169 of the Law, may, at any time, demand the
convening of a meeting of the Board of Directors. The Secretary shall
be obliged, on such demand, to call such meeting on the date
requested by the director or C.E.O soliciting such a meeting,
provided that proper notice pursuant to Article 96.1 is given.
96.
96.1. Every director shall be entitled to receive notice of
meetings of the Board of Directors, and such notice may be
in writing or by facsimile or by telegram, sent to the
last address given by the director for purposes of
receiving notices, provided that the notice shall be given
at least the minimum number of days permitted by
applicable law and in no event less than forty-eight hours
notice.
96.2. Every director shall be entitled to be present and to vote
through a proxy at any meeting of the directors or at
meetings of a committee of directors, provided that such
proxy is appointed in writing under the signature of the
person who appointed him. Such appointment may be of a
general nature or for purposes of one meeting or several
meetings. A proxy so appointed shall not be entitled to
vote in place of the person who appointed him at any
meeting of the Board of Directors or of a committee of
directors at which the director who appointed him is
himself present, or is represented thereat by the
alternate he himself appointed.
97. Every meeting of the Board of Directors at which a quorum is present
shall have all the powers and authorities vested for the time being
in the Board of Directors.
98. Questions which arise at meetings of the Board of Directors shall be
decided by a simple majority. In the case of an equality of votes of
the Board of Directors, the chairman of the Board of Directors shall
not have a second or casting vote, and the proposal shall be deemed
to be defeated.
If the chairman of the Board of Directors is not present within 30
(thirty) minutes after the time appointed for the meeting, the
directors present shall elect one of their number to preside at such
meeting.
99. For the removal of doubt, it is recorded that subject to the
provisions of the Law, an officer who is a director may be elected as
permanent chairman of the Board of Directors.
100. The Board of Directors may adopt resolutions even without an actual
meeting, on condition that all the Directors entitled to participate
in the deliberations and to vote on the matter brought up for a
decision agreed thereto.
The delivery of the text of the resolution submitted for approval of
the directors without the holding of a meeting of the Board of
Directors shall be done in accordance with those rules which apply to
the giving of notice in regard to the holding of meetings of
directors, as set forth in Article 96 above.
101. The Board of Directors may hold meetings by use of any means of
communication, on condition that all participating directors can hear
each other at the same time. In the case of a resolution passed by
way of telephone calls, a copy thereof shall be sent, as soon as
possible thereafter, to the directors.
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GENERAL POWERS OF THE BOARD OF DIRECTORS
102. The administration of the business of the Company shall be in the
hands of the Board of Directors, which shall be entitled to exercise
all the powers and authorities and to perform any act and deed which
the Company is entitled to exercise and to perform in accordance with
its Memorandum of Association and these Articles or according to law,
and in respect of which there is no provision or requirement in these
Articles, or in the Law or/and in the U.S. rules, that same be
exercised or done by the Company in a General Meeting.
103. The Board of Directors may, as it deems fit and subject to any law,
delegate to a committee (hereinafter: "COMMITTEE OF DIRECTORS") its
powers and authorities, in whole or in part. The Board of Directors
may, from time to time, widen, curtail or revoke such delegation of
powers and authorities. A Committee of Directors in exercising powers
delegated to it by the Board of Directors shall comply with all the
provisions and conditions prescribed by the Board of Directors,
provided that the curtailment or revocation of powers and authorities
by the Board of Directors shall not invalidate an act done prior
thereto by a Committee of Directors or in accordance with its
instructions, which would have been valid had the powers and
authorities of the Committee of Directors not been altered or revoked
by the Board of Directors. A Committee of Directors may be comprised
of one director or of several directors, and persons who are not
directors may be co-opted to it.
104. The meetings and proceedings of every such Committee of Directors
which is comprised of two or more members shall be conducted in
accordance with the provisions contained in these Articles in regard
to the regulating of the meetings and proceedings of the Board of
Directors to the extent that same are suitable for this, and so long
as no provisions have been made in replacement thereof by the Board
of Directors.
RATIFICATION OF ACTIONS
105. All acts done in good faith by the Board of Directors and/or a
Committee of Directors or by a person acting as a member thereof
shall be valid even if it is subsequently discovered that there was a
defect in the appointment of the Board of Directors, the Committee of
Directors or the member, as the case may be, or that the members, or
one of them, was/were disqualified from being appointed as a
director/s or to a Committee of Directors.
106.
106.1. The Board of Directors may ratify any act the performance
of which at the time of the ratification was within the
scope of the authority of the Board of Directors.
106.2. The General Meeting shall be entitled to ratify any act
done by the Board of Directors and/or any Committee of
Directors without authority, or acting ultra vires, or
which was tainted by some other defect.
106.3. From the time of the ratification, every act ratified as
aforesaid, shall be treated as though lawfully performed
from the outset.
107. The Board of Directors may, from time to time, in its absolute
discretion, borrow or secure any amounts of money required by the
Company for the conduct of its business.
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108. The directors shall be entitled to raise or secure the repayment of
an amount obtained by them, in such way and on such conditions and
times as they deem fit. The directors shall be entitled to issue
documents of undertaking - options, debentures or debenture stock,
whether linked or redeemable, convertible debentures or debentures
convertible into other securities, or debentures which carry a right
to purchase shares or to purchase other securities, or any mortgage,
pledge, collateral or other charge over the property of the Company
and its undertaking, in whole or in part, whether present or future,
including the uncalled share capital or the share capital which has
been called but not yet paid.
The deeds of undertaking, debentures of various types or other forms
of collateral security may be issued at a discount, at a premium or
otherwise and with such preferential or deferred or other rights, as
the Board of Directors shall, from time to time, decide.
SIGNING POWERS
109. Subject to any other resolution on the subject passed by the Board of
Directors, the Company shall be bound only pursuant to a document in
writing bearing its seal or its rubber stamp or its printed name, and
the signature of whomever may be authorized by the Board of
Directors, which shall be entitled to empower any person, either
alone or jointly with another, even if he is not a member of the
Company or a director, to sign and act in the name and on behalf of
the Company.
110. The Board of Directors shall be entitled to prescribe separate
signing power in regard to different businesses of the Company and in
respect of the limit of the amounts in respect of which such persons
shall be authorized to sign.
SECRETARY, OFFICE-BEARERS, CLERKS AND REPRESENTATIVES
111. The Board of Directors shall be entitled, from time to time, to
appoint a secretary for the Company, as well as office-bearers,
clerks, employees and agents to such permanent, temporary or special
positions, and to specify and change their titles, authorities,
duties, salaries and their bonuses. The Board of Directors shall be
entitled at any time, in its sole and absolute discretion, to
terminate the services of one of more of the foregoing persons.
112. The Board of Directors may from time to time and at any time empower
any person to serve as representative of the Company for such
purposes and with such powers and authorities, instructions and
discretions for such period and subject to such conditions as the
Board of Directors shall deem appropriate. The Board of Directors may
grant such person, inter alia, the power to transfer the authority,
powers and discretions vested in him, in whole or in part. The Board
of Directors may, from time to time, revoke, annul, vary or change
any such power or authority, or all such powers or authorities
collectively.
DIVIDENDS, BONUS SHARES, FUNDS AND CAPITALIZATION OF FUNDS AND PROFITS
113. The Board of Directors may, prior to recommending any dividend, set
aside out of the profits of the Company such amounts as it deems fit
for a reserve fund for extraordinary purposes or for the equalization
of dividends or for special dividends, or for the repair,
improvement, maintenance or replacement of the property of the
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Company, or for any other purpose, as the Board of Directors, in its
sole and absolute discretion, shall deem expedient.
114. The Board of Directors shall be entitled to invest the amounts set
aside as aforesaid in Article 113 above in any investments
whatsoever, as it may deem fit, and from time to time deal with such
investments and vary same, and make use thereof, as it deems fit, and
it may divide the reserve fund into special funds in such manner as
it deems fit, and may utilize a fund or part thereof for the business
of the Company, without being obliged to keep same separate from the
remaining assets of the Company.
115. No dividend shall be paid other than out of the Profits of the
Company as such term is defined in the Law.
116. The Board of Directors may decide on the payment of a dividend or on
the distribution of bonus shares.
117. A dividend in cash or bonus shares shall be paid or distributed, as
the case may be, to the holders of the ordinary shares registered in
the Register, pro rata to the nominal amount of capital paid up or
credited as paid up on the shares, without reference to any premium
which may have been paid thereon. However an amount paid on account
of a share prior to the payment thereof having been called, or prior
to the due date for payment thereof, and on which the Company is
paying interest, shall not be taken into account for purposes of this
article as an amount paid-up on account of the share.
118. Unless other instructions are given, it shall be permissible to pay
any dividend by way of a check or payment order to be sent by post to
the registered address of the member or the person entitled thereto,
or in the case of joint shareholders being registered, to the member
whose name stands first in the Register in relation to the joint
shareholding. Every such check shall be made in favor of the person
to whom it is sent. A receipt by the person whose name, on the date
of declaration of the dividend, was registered in the Register as the
owner of the shares, or in the case of joint holders, by one of the
joint holders, shall serve as a discharge with regard to all the
payments made in connection with such share.
The directors shall be entitled to invest any dividend which has not
been claimed for a period of one year after having been declared, or
to make use thereof in any other way for the benefit of the Company
until such time as it is claimed. The Company shall not be obliged to
pay interest or linkage in respect of an unclaimed dividend.
119. Unless otherwise specified in the terms of issue of shares or of
securities convertible into shares, or which grant a right to
purchase shares, fully paid-up or credited as paid-up shares at any
time shall confer on their holders the right to participate in the
full dividends and in any other distribution the determining date for
the right to receive same is the date at which the aforesaid shares
were fully paid-up or credited as fully paid-up, as the case may be,
or subsequent to such date.
120. A dividend or other beneficial rights in respect of shares shall not
bear interest.
121. The Board of Directors shall be entitled to deduct from any dividend
or other beneficial rights, all amounts of money which the holder of
the share in respect of which the dividend is payable or in respect
of which the other beneficial rights were given, may owe to the
Company in respect of such share, whether or not the due date for
payment thereof has arrived.
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122. The Board of Directors shall be entitled to retain any dividend or
bonus shares or other beneficial rights in respect of a share in
relation to which the Company has a lien, and to utilize any such
amount or the proceeds received from the sale of any bonus shares or
other beneficial rights, for the discharge of the debts or
liabilities in respect of which the Company has a lien.
123. The Board of Directors may decide that the dividend is to be paid in
whole or in part, by way of a distribution of assets of the Company
in kind, including by way of debentures or debenture stock of the
Company, or shares or debentures or debenture stock of any other
company, or in any other way.
124.
124.1. The Board of Directors may, at any time and from time to
time, decide that any portion of the amounts standing for
the time being to the credit of any capital fund
(including a fund created as a result of a revaluation of
the assets of the Company), or which are held by the
Company as profits available for distribution, shall be
capitalized for distribution subject to and in accordance
with the provisions of the Law and of these Articles,
amongst those shareholders who are entitled thereto and
pro rata to their entitlement under these Articles,
provided that same shall not be paid in cash but shall
serve for the payment up in full either at par or with a
premium as prescribed by the Company, of shares which have
not yet been issued or of debentures of the Company which
shall be allotted and distributed amongst the members in
the aforesaid ratio as fully paid-up shares or debentures.
124.2. The Board of Directors shall be entitled to distribute
bonus shares and to decide that the bonus shares shall be
of the same class which confers on the shareholders or the
persons entitled thereto the right to participate in the
distribution of bonus shares, or may decide that the bonus
shares shall be of a uniform class to be distributed to
each of the shareholders or persons entitled to shares as
aforesaid, without reference to the class of shares
conferring the right to participate in the distribution on
the holder of the share or the person entitled thereto as
aforesaid.
125.
125.1. In every case that the Company issues bonus shares by way
of a capitalization of profits or funds at a time at which
securities issued by the Company are in circulation and
confer on the holders thereof rights to convert same into
shares in the share capital of the Company, or options to
purchase shares in the share capital of the Company (such
rights of conversion or options shall henceforth be
referred to as - THE "RIGHTS"), the directors shall be
entitled (in a case that the Rights or part thereof shall
not be otherwise adjusted in accordance with the terms of
their issue) to transfer to a special fund designated for
the distribution of bonus shares in the future (to be
called by any name the directors may decide on and which
shall henceforth be referred to as the "SPECIAL FUND") an
amount equivalent to the nominal amount of the share
capital to which some or all of the Rights they would have
received as a result of the issue of bonus shares, had
they exercised their rights prior to the determining date
for the right to receive bonus shares, including rights to
fractions of bonus shares, and in the case of a second or
additional distribution of bonus shares in respect of
which the Company acts pursuant to this Article, including
entitlement stemming from a previous distribution of bonus
shares.
25
<PAGE>
125.2. In the case of the allotment of shares by the Company as a
consequence of the exercise of entitlement by the owners
of shares in those cases in which the directors have made
a transfer to the Special Fund in respect of the Rights
pursuant to sub-article 125.1 above, the directors shall
allot to such shareholder, in addition to the shares to
which he is entitled by virtue of having exercised his
rights, such number of fully paid-up shares the par value
of which is equivalent to the amount transferred to the
Special Fund in respect of his rights, by way of a
capitalization to be done by the directors of an
appropriate amount out of the Special Fund and the
directors shall be entitled to decide on the manner of
dealing with rights to fractions of shares in their sole
discretion.
125.3. If after any transfer to the Special Fund has been made
the rights should lapse, or the period should end for the
exercise of rights in respect of which the transfer was
effected, without such rights being exercised, then any
amount which was transferred to the Special Fund in
respect of the aforesaid unexercised Rights shall be
released from the Special Fund and the Company can deal
with the amount so released in any manner it would have
been entitled to deal therewith had such amount not been
transferred to the Special Fund.
126. For the implementation of any resolution regarding a distribution of
shares or debentures by way of a capitalization of profits as
aforesaid, the directors may:
126.1. Resolve any difficulty which may arise in regard to the
distribution in such manner as they deem fit and may take
all the steps they deem expedient in order to overcome
such difficulty.
126.2. Issue certificates in respect of fractions of shares, or
decide that fractions of less than an amount to be decided
by the Board of Directors shall not be taken into account
for purposes of adjusting the rights of the shareholders
or may sell the fractions of shares and pay the proceeds
(net) to the persons entitled thereto.
126.3. To sign or appoint a person to sign on behalf of the
shareholders on any contract or other document which may
be required for purposes of giving effect to the
distribution and in particular they shall be entitled to
sign or appoint a person who shall be entitled to appoint
and submit a contract as referred to in Sections 291 and
292 of the Law.
126.4. To make any arrangement or other scheme which is required
in the opinion of the Board of Directors in order to
facilitate the distribution.
127. The Board of Directors shall be entitled, as it deems appropriate and
expedient, to appoint trustees or nominees for the holders of bearer
share certificates who for a period as prescribed by the Company,
have not applied to the Company to receive dividends, shares or
debentures out of capital, or other benefits, and also for those
registered shareholders who have failed to notify the Company of a
change of their address and who have not applied to the Company in
order to receive dividends, shares or debentures out of capital, or
other benefits during the aforesaid period. Such nominees or trustees
shall be appointed for the use, collection or receipt of dividends,
shares or debentures out of capital and rights to subscribe for
shares which have not yet been issued and which are offered to the
shareholders but they shall not be entitled to transfer the shares in
respect of which they were appointed, or to vote on the strength
thereof. In all the conditions of trust or the appointment of
nominees it shall be stipulated by the company that on first demand
by a holder of a share in respect of which the trustees or nominees
26
<PAGE>
hold office the trustees or the nominees shall be obliged to return
to such shareholder the share in question and/or all those rights
held by them on his behalf (all as the case may be). Any act and
arrangement done by such nominees or trustees and any agreement
between the Board of Directors and nominees or trustees shall be
valid and shall be binding in all respects.
128. The Board of Directors may from time to time prescribe the manner for
payment of dividends or the distribution of bonus shares and the
arrangement connected therewith. Without derogating from the
generality of the foregoing, the Board of Directors shall be entitled
to pay any dividends or moneys in respect of shares by sending a
check via the post to the address of the holder of registered shares
according to the address registered in the register of members of the
Company. Any dispatch of a check as aforesaid shall be done at the
risk of the shareholder.
In those cases in which the Board of Directors specifies the payment
of a dividend, distribution of shares or debentures out of capital,
or the grant of a right to subscribe for shares which have not yet
been issued and which are offered to the shareholders against the
delivery of an appropriate coupon attached to any share certificate,
such payment, distribution or grant of right to subscribe against a
suitable coupon to the holder of such coupon, shall constitute a
discharge of the Company's debt in respect of such operation as
against any person claiming a right to such payment, distribution or
grant of right to subscribe, as the case may be.
129. If two or more persons are registered as joint holder of a share,
each of them shall be entitled to give a valid receipt in respect of
any dividend, share or debenture out of capital, or other moneys, or
benefits, paid or granted in respect of such share.
BOOKS OF THE COMPANY
130. The Board of Directors shall comply with all the provisions of the
Law in regard to the recording of charges and the keeping and
maintaining of a register of directors, register of members and
register of charges.
131. Any book, register and record the Company is obliged to keep in
accordance with the Law or in pursuance of these Articles shall be
conducted by recording in regular books, or by technical, mechanical
or other means, as the Board of Directors shall decide.
132. The Company may subject to the provisions of the Law and any other
law, maintain a register or registers of members in any other country
to which the aforesaid provisions apply where members live in such
other country, and may exercise all the powers mentioned in the
Companies Ordinance with regard to such branch registers.
BOOKS OF ACCOUNT
133. The Board of Directors shall cause proper books of account in
accordance with the provisions of the Law. The books of account shall
be kept at the Office, or at such other place or places as the Board
of Directors shall deem expedient, and shall at all times be open to
the inspection of members of the Board of Directors. A member of the
Company who is not a member of the Board of Directors shall not have
the right to inspect any books or accounts or documents of the
Company, unless such right has been expressly granted to him by the
27
<PAGE>
Law, or if he has been permitted to do so by the Board of Directors
or by the Company in a General Meeting.
134. The Board of Directors shall from time to time arrange and submit to
the General Meeting a balance sheet and statement of income of the
Company.
A copy of the balance sheet and the statement of income shall be
delivered to the members registered in the Register in the manner
prescribed in regard to the giving of notices, seven days prior to
the meeting.
The provisions of this article shall not make it obligatory to send a
copy of the aforesaid documents to a member whose address is unknown
to the Company, or to more than one joint holder of a share. Any
member to whom a copy of the aforesaid documents is not sent, and
also a person who produces to the Company a certificate from a bank
in Israel to the effect that shares of the Company are held for him
at such bank, shall be entitled to request to receive copies of such
documents at the office of the Company.
135. At least once each year the accounts of the Company and the
correctness of the statement of income and the balance sheet shall be
audited and confirmed by an auditor or auditors.
136. The Company shall, in General Meeting, appoint an auditor or auditors
who shall hold such position until the next ordinary meeting, and
their appointment, their remuneration their rights and duties shall
be subject to the provisions of the Law, provided, however, that in
exercising its authority to fix the remuneration of the auditor(s),
the shareholders in general meeting may, by an Ordinary Resolution,
act (and in the absence of any action in connection herewith shall be
deemed to have so acted) to authorize the Board of Directors to fix
such remuneration subject to such criteria or standards, if any, as
may be provided in such Ordinary Resolution, and if no such criteria
or standards are so provided, such remuneration shall be fixed in an
amount commensurate each with the volume and nature of the services
rendered by the auditor(s). By an act appointing such auditors, the
Company may appoint the auditor(s) to serve for a period of up to the
end of completion of the audit of the yearly financial statement for
the three subsequent years.
137. The auditor shall be entitled to receive notices of every General
Meeting of the Company and to attend such meetings and to express his
opinions on all matters pertaining to his function as the auditor of
the Company.
138. Subject to the provisions of the Law any act done by the auditors of
the Company shall be valid as against any person doing business in
good faith with the Company, notwithstanding any defect in the
appointment or qualification of the auditors.
NOTICES
139. Subject to any other provisions stated in the U.S. rules, the Company
shall give notice to its shareholders of any class by publishing a
notice in one daily newspaper, and the date of publication in the
newspaper shall be deemed to be the date on which the notice was
received by the shareholders, or, in its discretion, as prescribed in
Article 146 below.
28
<PAGE>
140.
140.1. The Company may serve a notice on a member by way of
delivery by hand or by dispatch via the post to his
address as recorded in the register, or if there is no
such recorded address, to the address given by him to the
Company for the sending of notices to him. If a notice is
sent by post, the notice shall be deemed to have been duly
delivered if it is properly addressed, with prepaid
stamps, and the letter containing the notice is sent via
the post.
140.2. Any notice or document which is delivered or sent to a
member in accordance with these Articles shall be deemed
to have been duly delivered and sent in respect of the
shares held by him (whether in respect of shares held by
him alone or jointly with others), notwithstanding the
fact that such member has died or been declared bankrupt
at such time (whether or not the Company knew of his death
or bankruptcy), and shall be deemed to be sufficient
delivery or dispatch to heirs, trustees, administrators or
transferees and any other persons (if any) who have a
right in the shares.
140.3. Any notice or other document sent by post according to an
address shall be deemed to have been delivered within 7
days from the time the letter containing the notice or
document was delivered to the post, and in proving such
delivery it shall be sufficient to prove that the letter
containing the notice or another notice to such member was
delivered as aforesaid and accordingly shall not lead to
the rescission of a resolution passed at such meeting or
the setting aside of proceedings based on such notice. Any
record ordinarily made in the register of the Company
shall be deemed to be prima facie proof of such dispatch
as recorded in such register.
141. In the case of joint holders of a share the Company shall be entitled
to deliver a notice by dispatch to the joint holder whose name stands
first in the Register in respect of such share.
142. Wherever it is necessary to give notice of a particular number of
days or a notice for another period, the day of delivery shall be
counted in the number of days or the period, unless otherwise
specified. Unless otherwise prescribed in these Articles, the holders
of bearer shares shall not be entitled to receive notice of any
General Meeting of the Company.
REORGANIZATION OF THE COMPANY
143. On the sale of the Company's undertaking, the directors may, or in
the case of a liquidation, the liquidators may, if authorized to do
so by an Ordinary Resolution of the Company, accept fully or partly
paid-up shares, or securities of another company, Israeli or foreign,
whether in existence at such time or about to be formed in order to
purchase the property of the Company, or part thereof, and if the
profits of the Company so permit, the directors may - or in the case
of a liquidation, the liquidators may - distribute the aforesaid
shares or securities or any other property of the Company amongst the
members without realizing same, or may deposit same in the hands of
trustees for the members, and the General Meeting by Ordinary
Resolution may decide, subject to the provisions of the Law, on the
distribution or allotment of cash, shares or other securities, or the
property of the Company and on the evaluation of the aforesaid
securities or property at such price and in such manner as the
meeting shall decide, and all the shareholders shall be obliged to
accept any valuation or distribution permitted as aforesaid and to
waive their rights in this regard, except in a case that the Company
is about to be wound-up and is in the process of liquidation to such
29
<PAGE>
legal rights (if any) which, according to the provisions of the Law,
may not be changed or modified.
INSURANCE AND INDEMNITY
144. For purposes of these Articles, the term "OFFICE HOLDER" shall mean
every Director and every officer of the Company, including, without
limitation, each of the persons defined as "Nosei Misra" in the Law.
145. Subject to the provisions of the Law, the Company shall be entitled
to enter into a contract to insure all or part of the liability of an
Office Holder of the Company, imposed on him in consequence of an act
which he has performed by virtue of being an office holder, in
respect of any of the following:
145.1. The breach of a duty of care to the Company or to any
other person;
145.2. The breach of a fiduciary duty to the Company, provided
that the officer acted in good faith and had reasonable
grounds for believing that the action would not adversely
affect the best interests of the Company;
145.3. A pecuniary liability imposed on him in favor of any other
person in respect of an act done in his capacity as an
Office Holder.
146. Subject to the provisions of the Law, the Company shall be entitled
to indemnify an Office Holder of the Company in respect of any of the
following:
146.1. A pecuniary liability imposed on him in favor of any other
person in terms of a judgment, including a judgment given
in the scope of a compromise or an arbitrator's ruling
which is confirmed by the court, in respect of an act done
by him in his capacity as an officer of the Company;
146.2. Reasonable costs of litigation, including attorneys' fees,
incurred by the officer, or which he is ordered by the
court to pay in proceedings instituted against him by the
Company, or on its behalf, or by any other person, or in a
criminal indictment in which judgment is given in his
favor or in respect of which he is acquitted, or in a
criminal indictment in which he was convicted of a felony
which does not require proof of criminal intent, in
relation to an act done by him in his capacity as an
officer of the Company.
WINDING-UP
147. Should the Company be wound up and the assets of the Company
available for distribution amongst members be insufficient to repay
all the paid-up capital, such assets shall be divided in a manner
whereby the losses shall, as far as possible, be borne by the members
pro rata to the nominal value of the paid-up capital on the shares
held by each one of them, and if at the time of the winding-up the
property of the Company available for distribution amongst the
members should exceed the amount sufficient for the repayment of the
full nominal value of the paid-up capital at the time of commencement
of the winding-up, the surplus shall be distributed to the members
pro rata to the paid-up capital held by each of them.
30
<PAGE>
FUNDTECH LTD.
PROXY
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER 30, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Oz Cohen and Michael S. Hyman, and
each of them severally, as proxies of the undersigned, with full power of
substitution to vote all of the shares of Fundtech Ltd., an Israeli corporation
(the "Company"), which the undersigned may be entitled to vote at the Annual
Meeting of Shareholders of the Company to be held at 12 Ha'hilazon Street (5th
floor), Ramat Gan, Israel on November 30, 2000 at 10:00 a.m. (local time) or at
any adjournment or postponement thereof, as shown on the voting side of this
card.
THIS PROXY WILL BE VOTED AS SPECIFIED. IF A CHOICE IS NOT SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE NOMINEE DIRECTORS, FOR PROPOSALS 2, 3, 4, 5, 6,
7 AND 8 AND IN THE DISCRETION OF THE PROXIES WITH RESPECT TO ALL OTHER MATTERS
WHICH MAY PROPERLY COME BEFORE THE MEETING AND ANY AND ALL ADJOURNMENTS THEREOF.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE.)
SEE REVERSE
SIDE
<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
FUNDTECH LTD.
NOVEMBER 30, 2000
Please Detach and Mail in the Envelope Provided
[X] Please mark your votes as in this example.
<TABLE>
<S> <C> <C> <C>
This proxy will be voted as specified. If a choice is not
specified, this proxy will be voted FOR the nominee directors,
FOR WITHHOLD FOR Proposals 2, 3, 4, 5, 6, 7 and 8 and in the discretion of
all nominees AUTHORITY the proxies with respect to all other matters which may
(except as to vote for properly come before the meeting and any and all adjournments
indicated) all nominees thereof.
FOR AGAINST ABSTAIN
1 Elect
the
directors
of Nominees: Reuven Ben-Menachem 2 Approve the service of [ ] [ ] [ ]
the Company. [ ] [ ] Mr. Reuven Ben-Menachem
George M. Lieberman as Chairman of the Board
and CEO.
Jay B. Morrison
Achi Racov
Rina Shainski
Rimon Ben-Shaoul
Gil Weiser
(Instructions: To 3 Ratify and approve an [ ] [ ] [ ]
withhold authority to increase in the number of
vote for any Ordinary Shares reserved
individual nominee for issuance pursuant to
strike a line through the Company's Directors'
that nominee name) Option Plan.
4 Approve the compensation [ ] [ ] [ ]
of the Company's
directors for 2000.
5 Ratify and approve [ ] [ ] [ ]
the compensation and
Option Awards of Mr.
Reuven Ben-Menachem, a
member of the Company's
Board of Directors and
Fundtech's CEO.
6 Ratify and approve [ ] [ ] [ ]
amendments to the
Company's 1997 Israel
Plan and 1999 Option
Plan, increasing the
aggregate number of
Ordinary Shares reserved
under such Plans.
7 Ratify the appointment [ ] [ ] [ ]
of Kost, Forer and Gabbay,
a member of Ernst and
Young International,
independent certified
public accountants, as
auditors for the Company
for fiscal year 2000 and
authorize the Board of
Directors to set the
remuneration for such
auditors.
8 Ratify and approve [ ] [ ] [ ]
amendments to the
Company's Articles of
Association.
Dated: , 2000
------------------------------------------ ---------------------------------------------- ----------------
(SIGNATURE) (SIGNATURE IF HELD JOINTLY)
</TABLE>
NOTE: This proxy should be dated and signed by the stockholder exactly as
the stockholder's name appears hereon and returned promptly in the
enclosed envelope. Persons signing in a fiduciary capacity should so
indicate. Please sign exactly as name(s) appear hereon. Joint owners
should each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
